China has struck back in its trade dispute with the Trump administration, imposing tariffs on $50bn of US goods.
Beijing is targeting 106 US products, including aircraft, cars and soybeans, after Washington imposed its own tariffs on Chinese goods.
The measures are expected to badly hit the Dow Jones and soybeans futures have fallen almost 5%.
“China has taken out big guns to answer Trump’s tariff, the trade war is here,” Naseem Aslam, chief market analyst at Think Markets said.
“Farmers over in the US are going to be very nervous as China is planning to put tariffs on soft commodities such as soybean. The commodity has taken a nose dive after the announcement.”
Donald Trump has accused Beijing of violating intellectual property agreements after it pressured foreign companies to hand over crucial technology before they get access to the Chinese market.
Earlier this week, Beijing hiked tariffs on US pork and other products after President Trump approved import duties on steel and aluminium.
Mr Trump has vowed to narrow the $375bn trade imbalance with Beijing.
We are not in a trade war with China, that war was lost many years ago by the foolish, or incompetent, people who represented the U.S. Now we have a Trade Deficit of $500 Billion a year, with Intellectual Property Theft of another $300 Billion. We cannot let this continue!
— Donald J. Trump (@realDonaldTrump) April 4, 2018
“We are not in a trade war with China, that war was lost many years ago by the foolish, or incompetent, people who represented the US,” the President tweeted.
“Now we have a Trade Deficit of $500 Billion a year, with Intellectual Property Theft of another $300 Billion. We cannot let this continue!”
China’s foreign ministry spokesman Geng Shuang said Beijing had hoped talks would resolve the issues and blamed the US for the trade dispute.
“The best opportunities for resolving the issues through dialogue and negotiations have been repeatedly missed by the US side,” Mr Shuang said.
The US could end up the loser from a trade war, according to Mr Aslam.
“The US Aircraft industry has also become a target of the Chinese reciprocal tariffs and traders have started to position themselves in the US pre-market, we are seeing more short interest when it comes to companies like Boeing, it is down by 3.4%,” he said.