On July 6, 2018 China’s Foreign Ministry spokesman, Lu Kang, said China’s tit-for-tat measures “had taken effect immediately after the implementation of the US tariffs.” He was speaking after Washington’s 25 percent duties on U.S. $34 billion worth of Chinese goods came into force earlier in the day. China’s Ministry of Commerce had said earlier that "China will not fire the first shot, but is inevitably forced to strike back to defend the core interest of the nation and its people. We will report to the World Trade Organisation on a timely basis.” U.S. President Donald Trump has threatened to target another U.S. $400 billion in Chinese products with tariffs if Beijing continues to hit back. Each country has prepared a second tariff list of goods worth about U.S. $16 billion. 

The American tariffs on a total of U.S. $50 billion worth of Chinese imports were based on a US investigation into China’s forced technology transfers and intellectual property theft from U.S. businesses operating in China. In retaliation, the U.S. government proposed a list of 1,333 targeted products in early April. In an updated list published on June 15, Washington dropped many China-made consumer goods, such as TVs and flat panel screens, and added more intermediary products like semiconductors and plastics, after opposition during a public hearing in May. The second tariff list focuses particularly on “Made in China 2025," a Chinese industrial policy aimed at getting ahead in high-tech industries. It includes electronic integrated circuits and the machines that produce them. China struck back in April with a list of U.S. $50 billion worth of U.S. imports, many of which were agricultural products. Beijing later removed U.S. $16.3 billion worth of U.S. aircraft from the list and added more food such as fish and nuts. The primary U.S. goods affected are soybeans and vehicles, while it is mostly Chinese industrial goods hit by U.S. tariffs.

(Comments: In theory, China cannot keep matching the scale of the American tariffs. Last year, China imported about U.S. $130 billion worth of goods from the U.S. but exported U.S. $500 billion worth. If the trade war keeps escalating, China may have to resort to non-tariff measures, such as limiting U.S. investment in China, although Beijing has so far hesitated to officially go down that route. A potential target could be the total sales of U.S.-invested companies in China, which reached U.S. $481 billion in 2015, according to data from the U.S. Department of Commerce’s Bureau of Economic Analysis.  Xie Yanmei, an analyst with the investment research firm Gavekal, wrote in a recent note that “China may well see curbs on US businesses in China as a justifiable response to restrictions on Chinese investment in the US. There is a large arsenal of regulatory tools it could deploy.”)