The first round just ended on Monday when China slapped tariffs up to 25% on 128 American-made products.
On Tuesday, April 3rd, Trump administration started the second round when it fired back a 25% tariff on 1,300 Chinese products including software, patents and other technology to penalize its theft of trade practices. The tariffs will be imposed on $50 billion worth of Chinese products each year.
Only few hours later, on Wednesday April 4th, China retaliated with a proposed tariffs on $50 billion worth of 106 American products such as soybeans, cars, chemicals, and even aircraft and autos. Upon hearing of this, President Trump tweeted:
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
It might take a few months for the tariffs measures to come into force. Both sides announced that the dates of enforcement will be announced in the future. American companies will have a chance to file final objections until May 22th, and the Trump administration will hold a public hearing on the submissions on May 15th in Washington.
It’s unclear that when the tariffs measure will take place. It’s even not certain whether or not the final plans from both sides will be the same as the proposed measures. Meanwhile, the battle of will and ego has already had such a big impact and significant harm on both American’s and China’s markets for the past few days.
We will see how this test of will act out between two largest economies before both sides come to a final conclusion on this second round.