New York (CBS MarketWatch): The U.S. and China slapped levies on $34 billion of each other’s exports, the first tangible shots in a trade battle that both sides are bracing to fight for months—if not years.
The new levies took effect at midnight Eastern Time in the U.S. In response, a commission of China’s State Council said it applied tariffs on 545 items “including agricultural products, vehicles and aquatic products,” according to state-run Xinhua News Agency.
President Xi Jinping has instructed various levels of government to get ready for a full-bore trade war, according to Chinese officials. “With his tariff threats, Trump is posing an unprecedented challenge to the leadership,” said Zhu Feng, a professor of international relations at Nanjing University, referring to President Donald Trump.
“It’s the biggest application of tariffs by the U.S. and affecting U.S. trade since Smoot-Hawley.”
Dartmouth trade historian Douglas Irwin, referring to the 1930 duties thought to have worsened the Great Depression.
Brookings Institution China scholar David Dollar, who was the U.S. Treasury’s top official in Beijing during the Obama administration, figures the fight will stretch into next year, at least, because a strong economy will make it less likely that the U.S. will feel any immediate economic pressure from the trade fight.