After Trump's announcement on Thursday that he will impose tariffs on up to $60 billion worth of Chinese goods and impose investment restrictions on Beijing, it is far from clear what Trump's endgame is, trade experts say.
What the Trump administration appears to be doing is putting "bargaining chips" on the table for coming talks with Beijing, said Wallace Cheng, China managing director for the International Centre for Trade and Sustainable Development.
Meanwhile, American stocks sank again for the second straight day, giving Wall Street its worst week in two years, as fear gripped investors that China and the US were headed for a trade war. Underscoring that fear, the Dow Jones Industrials fell 723 points on Thursday. Moving them to lower-cost countries such as Vietnam, while a good idea in theory, is not practical in the real world, Gold said.
Kennedy said a deal to cut China's $375 billion USA goods trade surplus by $100 billion is far easier to achieve with additional purchases of US soybeans, beef, liquefied natural gas, Boeing aircraft and other equipment. Its ministry of commerce said it planned to impose a 15% duty on 120 types of USA products, like fruits, nuts, wine and seamless tubes, worth $977 million, and a 25% levy on other products, including pork and recycled aluminum.
The White House says the planned tariffs are aimed at punishing Beijing for allegedly stealing American technology and pressuring USA companies to hand it over.
Trump announced $60 billion worth of annual tariffs on Chinese imports in a retaliatory move for China's assumed theft of American intellectual property.
If Beijing feels it is necessary, another group of American-made goods would then draw 25 per cent tariffs, including pork, which is a lucrative slice of USA exports to China.
At a time when US wine exports have been slipping overall, there's been growth in exports to China, where a rapidly growing middle class is adopting many Western tastes.
Betty Wang, an economist at ANZ bank, said China's reaction is "relatively mild".
"China has cheated, stolen and bullied American industry on trade for decades, causing massive economic wreckage to workers, employers and communities across America in the process. Coming back to the negotiation table is a relatively good result", Wang said.
"We will retaliate. If people want to play tough, we will play tough with them and see who will last longer", Chinese ambassador Cui Tiankai said in a video posted to the embassy's Facebook page. The result will be a USA government that is distracted by China -which could ultimately be good news for NAFTA, he said. He also issued a third proclamation exempting Argentina, Australia, Brazil, Canada, Mexico, EU member countries and South Korea from the tariffs through May 1, "pending discussions of satisfactory long-term alternative means to address the threatened impairment to US national security".
The United States on Friday officially filed a trade complaint at the World Trade Organisation (WTO) against China over its alleged discriminatory technology licensing practices.
Also omitted from the exemption list was US ally Japan, though a government spokesman said Tokyo would press to be included.
White House officials said the actions came after years of efforts failed to convince China to change its behavior. A second list of goods, including wine, apples, ethanol and stainless steel pipe, would be charged 15 per cent, mirroring Trump's tariff hike on aluminum. But the European Union said it would "reserve its rights" to impose countermeasures as long as the exemption remained temporary. American industry, agriculture in particular, as well as members of the president's own Republican party have voiced strident opposition to his recent trade moves.
"Obviously if US prices increase you're going to see an impact", said council vice president Karl Littler.
American farmers "should be not necessarily infuriated but close to it", said Wayne Humphreys, who farms corn and soybeans and raises hogs and cattle near Columbus Junction, Iowa.