On Tuesday, the Trump administration unveiled a 25 percent tariff on $50 billion worth of Chinese goods, from lithium batteries to flame throwers, and a few hours later, China hit back, saying that if Trump imposes the tariffs after the May 11 public comment period ends, China will slap 25 percent tariffs on a list of 106 U.S. products, including soybeans, airplanes, and automobiles. The speed of the retaliatory tariffs surprised analysts, and the inclusion of soybeans, the top U.S. agricultural export to China, underscored the seriousness with which China is taking Trump's trade moves.
This is the second round of trade war warnings between the Trump administration and China. On Monday, China announced $3 billion worth of import duties on U.S. fruit, pork, wine, and other goods, to match Trump's 25 percent tariff on steel and 15 percent tariff on aluminum. Peter Navarro, a White House aide and top architect of Trump's hawkish trade policy, told CNBC on Monday that "everybody needs to relax" about the trade war fears, insisting that Trump's trade policies are "good for the market." Fellow economists from both parties disagreed with his analysis — on trade, inflation, the effects of the tax cuts, foreign investment, and basic economic principles. "99.999999% of economists agree," former Obama economic adviser Jason Furman told CNBC. "The rest are Peter Navarro."