As the United States' tariffs on $34 billion worth of Chinese goods come into effect, China has retaliated by imposing 25 per cent tariff on 545 products from America. They kicked in just after midnight ET, which is noon in Beijing.
The Foreign Ministry in Beijing said retaliatory measures "took effect immediately", with state news agency Xinhua confirming they involved 25% tariffs on an equal amount of goods.
The Trump administration is confronting Beijing over development tactics it says include stealing or pressuring foreign companies to hand over technology.
Beijing insists it's the injured party.
It accused the United States of "typical trade bullying".
On Thursday, Trump said that he is willing to slap tariffs on up to $550 billion, which actually exceeds the current value of Chinese imports to the United States by $46 billion.
The tariffs would mark a significant escalation in the trade dispute between the world's two biggest economies.
While the USA tariffs aim to cut down the trade deficit, there are worries about how China's retaliatory tariffs will hit the U.S. economy.
Wall Street is well conditioned to ignore the often hyperbolic words of US President Donald Trump, and on Friday investors shrugged off comments that his administration is ready to massively escalate a tariff battle that began in earnest on Friday.
The big question is how far the hostilities between Washington and Beijing will go. It said they would damage the global economy unless other countries stop them.
Formula One: Eric Boullier Resigns As McLaren's Racing Director
He was promoted to a permanent seat last year and showed early signs of promise but that has somehow fizzled out this year. McLaren are now sixth in the constructors' championship on 44 points.
"Then you have another 16 [billion] in two weeks and then as you know we have 200 billion in abeyance and then after the 200 billion we have 300 billion in abeyance. OK?" He said the final list of covered imports will be announced by June 15, 2018. The Peterson Institute for International Economics shows that nearly two-thirds of USA imports from China come from companies with foreign capital, another avenue through which U.S. tariffs targeted at China have an impact beyond its borders.
Because products that are made in China - from Apple products to Nike ones - are going to get expensive, and be more expensive on the shelves of Walmart for everyday American consumers.
"Once these tariffs start going into effect, it's pretty clear the conflict is real", said Robert Holleyman, former deputy U.S. trade representative under President Barack Obama and now a partner at law firm Crowell and Moring LLP. Heidi Heitkamp, D-N.D., highlighted further uncertainty caused by the renegotiation of the North American Free Trade Agreement and tariffs on steel and aluminum imports.
"The dynamic is different from anything we've seen", said Boughton.
Last month, the Trump administration said the new tariffs would apply to 1,102 Chinese products totaling $50 billion.
Friday's long-expected tariff volley fueled fear that a prolonged and escalating battle would deal a blow to global trade, investment and growth, while also damaging US farmers who stand to lose revenues and potentially driving up food prices in China.
Under the snippy headline " So much trade losing", the lead editorial compared the Trump trade war to the start of Civil War that led to nothing but tragedy for the rebels of the South. Negotiations between the two countries petered out with the Chinese accusing the U.S. of blackmail.
"This plays out over the next few months, until both sides start to feel a little pain and realise this isn't a bloodless march to victory", said Harris.
Analysts say China is unlikely to budge on those plans, which it sees as crucial for developing its huge economy.