Richard Quest: The US-China trade war has begun

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President Donald Trump escalated tensions Tuesday, proposing tariffs on a range of Chinese-made products worth about $50 billion with a focus on high-tech items. Treasury Secretary Steven Mnuchin, in a CNBC interview later on Friday, declined to give details about contacts between the two superpowers because doing so could reveal America's negotiating hand.

This trade fight will benefit cotton producers, but Brazil will not replace the U.S., the largest exporters in the world. "We haven't done that but such a list is under discussion". China wasted no time in firing back with 25-percent tariffs on imports of 106 US products, including soybeans, automobiles, chemicals, and aircraft.

The spat between the world's two largest trading nations started last month with U.S. tariffs on steel and aluminum; China responded in kind with tariffs on $3 billion worth of United States exports.

Responding to the USA move, Wang Shouwen, China's vice-minister for commerce said it was "unacceptable". The tariffs have not yet been implemented and the White House said it is open to negotiations with China, even though Beijing has been cool to talks.

Other markets, like cotton and corn, experienced short-term declines that were ultimately neutralized by the weekend, keeping growers optimistic about this year's crop prices.

Asked in an interview with NY station WABC about the effect on United States stock markets, Mr Trump said the market has gone up (since he took office) "so we might lose a little bit of it".

In both cases, the extra tariffs would only come into effect if the USA decides to go ahead with its $50 billion round of tariffs first announced on March 22.

The moves follow USA tariffs that were imposed earlier this year on Chinese steel and aluminum, which also prompted retaliatory measures from China.

Kudlow, a new hire to the president's economic team and a committed free-trader, said Trump is in regular contact with his Chinese counterpart Xi Jinping.

The International Monetary Fund also expressed concern, saying the proposed tariffs would likely damage the U.S. economy and those of other nations. "But I would say they have been unsatisfactory, so we will see".

US manufacturing giants that sell products in China, such as Apple, Boeing, Caterpillar, General Motors and Intel, are also expected to take a hit if China follows through on its threats. Trump has tweeted that it is "easy" to win a trade war.

That is doubly true in a potential trade war with China, for several reasons.

Those tariffs won't even go into effect until after a comment period, setting up a potentially long period of lobbying and negotiation that could rein in their scope or even delay them indefinitely. So far, it has confirmed tariffs on just $6 billion worth of Chinese imports-steel, aluminum, washing machines and solar panels. There's also no timeline for identifying which products will be subject to the second round demanded by Trump, an administration official said Friday.

The official stressed that the Chinese authorities are still ready for dialogue and negotiations over balancing trade turnover between the world's two biggest economies.