The trade standoff between the US and China is escalating. Following the US administration's imposition of tariffs on aluminium and steel last month, the president ramped up the pressure by adding 25 percent tariffs to a list of 1'333 Chinese imports earlier this week. Eleven hours later, China responded by imposing $50 bn in tariffs on 106 American products. These products include foods, including grains, wines, textiles, whiskey, and, perhaps most significantly, soya beans. In response, the American president has asked the Office of United States Trade Representative to examine imposing a further $100bn in tariffs on other Chinese products.

Although it is not certain, whether Donald Trump will actually slap on further tariffs, the Chinese administration has made it clear that it is not afraid of a Trade War. Moreover, it has vowed to match any new US tariffs.

China doesn't want a trade war but is ready to fight

On more than one occasion, the Chinese administration has stressed that it doesn't wish to engage in an all-out trade war and would prefer a more negotiation-focused approach. Bejing has condemned Donald Trump's latest tariffs threats but warned that the US had more to lose than China, especially politically. According to the Financial Times, a spokesman for the Chinese Ministry of Commerce reiterated that China was willing to implement "comprehensive countermeasures" even though "China doesn't want a trade war, but we're not afraid to fight a trade war." This is likely to mean that if Donald Trump forges ahead with additional tariffs, China will hit back without hesitation.

Speaking to the Financial Times, professor of international strategy, Chu Shulong, said the dispute wouldn't necessarily escalate into a trade war: "This is a strategy, not the start of a trade war. As with previous China-US disputes, the initial threats are very high but will be lowered when both sides start talking."

Donald Trump tones down his language on Twitter

Last month, the American president tweeted:"Trade wars are good, and easy to win." Earlier this week, he seemed to attempt to ease the tension a little with the following Tweet:

Members of the Republican party alongside industry leaders have been urging the president to take a more measured approach.

Who will pay the price for a potential US-China trade war?

The inclusion of soya beans on China's list of tariff-hit products is seen by many as a bold move. Tariffs on soya hit the American agricultural sector hard, however, Chinese pork farmers are also likely to suffer the consequences because they import soya beans as fodder for their pigs.

Businesses producing, selling, and importing tariff-hit products are likely to see a decline in revenue, while consumers will also be in the pocket.

It seems that China will match whatever move the US administration makes and is unlikely to buckle under any pressure.