US tariffs against Chinese imports took effect early Friday and President Donald Trump made clear Thursday that he is prepared to sharply escalate a trade war between the world's two biggest economies.
Ongoing trade tensions have weighed on the Chinese stock market, and led to a weakening of the yuan against the greenback.
White House trade officials say the current strength of the USA economy means Washington can withstand more pain than its rivals if the battle escalates further. "If this ends at $34 billion, it will have a marginal effect on both economies, but if it escalates to $500 billion like Trump said then it's going to have a big impact for both countries".
China added it had already imposed retaliatory measures on USA goods without immediately providing precise details.
Trump has railed against Beijing for intellectual property theft and barriers to entry for USA businesses and a $375 billion United States trade deficit with China.
Of course, there is a huge difference between a trade spat and an outright trade war.
In the run-up to Friday, there was no sign of renewed negotiations between U.S. and Chinese officials, business sources in Washington and Beijing said.
The start of the trade war likely confirms the widening rupture between Trump and his own Republican Party, a traditional champion of free trade and big business.
China is expected to match the move with a 25 percent levy on United States goods to the same value on the same day.
The dispute has roiled financial markets including stocks, currencies and the global trade of commodities from soybeans to coal in recent weeks.
Chinese buying of soybeans has ground nearly to a halt ahead of the duties, while Chinese farmers worry the penalties and tighter supplies will drive up costs, squeeze margins and ultimately inflate retail prices of pork, the country's top-selling meat.
An analysis of over four dozen imported U.S products facing higher duties showed that prices were little changed on Friday afternoon versus earlier in the week. The products, all sold on Chinese e-commerce platforms, ranged from pet food to mixed nuts and whiskey.
At the same time, China is trying to present a friendly face to foreign businesses, including American players.
Some Chinese ports had delayed clearing goods from the United States, four sources said on Friday.
As the world's most developed nation and the rule-maker of the current global governing system, there is "astounding absurdity" in the U.S. complaining that it's been bullied in trade, the People's Daily, the flagship newspaper of the Communist Party of China, said in a Chinese-language commentary on Friday.
As Beijing fired back with tariffs of its own, it accused the US of violating WTO rules and setting off "the largest trade war in economic history to date".
Months of dialogue between the two economic superpowers appeared to have failed, with Trump warning just hours before the tariffs came into effect that Washington was ready to impose duties on hundreds of billions of dollars more in Chinese imports.
The U.S.is considering an additional 25% duty on another $16 billion of Chinese goods, and China has said it will follow with similar measures if the U.S. goes ahead with the second batch of tariffs, according to previous statements from the two sides.
"In effect, the Trump administration is behaving like a gang of hoodlums with its shakedown of other countries, particularly China", the state-run China Daily newspaper said in an English language editorial on Friday.