Beijing - China responded to President Donald Trump's new tariffs by threatening tariffs of its own on 106 U.S. products, including on soybeans, cars and some airplanes, in the latest escalation of what risks becoming a tit-for-tat trade war between the world's two largest economies.
The plan, which was announced on Wednesday, would see Beijing slap 25 percent levies on a range of U.S. goods worth about $50 billion. Chinese officials did not set a date for implementation, saying what happens next will depend on whether the U.S. president pushes ahead with his tariff plans.
Though the tariffs are not in place yet, the news had an immediate impact on markets, including the soybean market.
Hong Kong's Hang Seng Index dropped 2.2 percent and South Korea's main exchange was down more than 1 percent. In Europe, all major markets opened lower, pointing to another expected slump when Wall Street opens.
Soybeans on the Chicago Board of Trade immediately dropped as much as 5.3 percent, while wheat and corn futures also slid, Bloomberg reported.
The Chinese announcement came a day after the White House unveiled plans for tariffs on $50 billion in Chinese imports across 1,300 categories, with 25 percent levies on Chinese goods ranging from electronics, aerospace and machinery to phones, shoes and furniture.
Though a response from Beijing was widely expected, the speed of the announcement came as a surprise, deepening fears of a rapid escalation.
At a press conference on Wednesday, Chinese officials did little to stem talk of "war," but stressed that Beijing is willing to work with the White House.
"If someone wants a trade war, we will fight to the end. If someone wants to talk, our door is open," said Wang Shouwen, vice-minister of commerce.
Zhu Guangyao, vice minister of finance said both sides were "showing their swords and making demands," but needed to get back to the negotiating table.
Trump tweeted his own take on the news. "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.," he wrote, "Now we have a Trade Deficit of $500 Billion a year, with Intellectual Property Theft of another $300 Billion. We cannot let this continue!"
Though the dollar amounts targeted by both sides are similar - $50 billion - the focus on U.S. soybean exports by China could have a particularly big impact on the United States.
Soybeans are the top U.S. agricultural export to China and U.S. soybean farmers and their allies fought hard to prevent the tariffs - something Zhu noted in the press conference.
The current U.S. ambassador to China, Terry Branstad, is the former governor of Iowa, a state that could be hit hard. In March, representatives from the Iowa Soybean Association visited him in China to plead their case, according to a Chinese report.
Christopher Balding, an associate professor at the HSBC Business School in Shenzhen, said that comparing the U.S. and Chinese lists showed China's willingness to target products like soybeans, automobiles and planes that could create political problems for Trump.
"Even though the numbers between China and the U.S. are comparable, it seems clear that China is trying to twist the knife," he said, "This is a warning that 'we are willing to fight harder and inflict more pain that you are.'"
The goal may be to get U.S. voters to stop Trump from pressing ahead. Farm states generally backed Trump in the 2016 election and their exports could be hurt.
"China is stirring up U.S. farmers to put pressure on the White House," said Shen Dingli, deputy dean of the Institute of International Affairs at Shanghai's Fudan University.
Wednesday's announcement means there are now two U.S.-China trade battles playing out.
In late March, the United States announced steel and aluminum tariffs that would penalize China to the tune of about $3 billion a year. On Monday, China returned fire by imposing similar measures on $3 billion worth of U.S. pork, fruit and other items.
Then, on Tuesday, the White House went ahead with tariffs that target manufacturing technology, arguing that Chinese trade practices have unfairly hurt U.S. business.
Trump has argued that the Chinese government forces U.S. companies to surrender proprietary technology to gain access to the Chinese market, resulting in the theft of trade secrets.
But critics say the U.S. president's protectionist trade moves will hurt the global supply chains of U.S. companies and could lead to higher prices for U.S. consumers.
The question now is if Trump will move ahead with the tariffs as announced or change course, potentially going to the table.
Shi Yinhong, a professor of international affairs at Renmin University in Beijing, said that China's move has signaled the country's willingness to go "tit for tat" in a trade war.
Today's move is "a rising wind that foretells a storm," he said, adding that whether that storm comes, "depends on President Trump."