The Trump administration proposed adding a 25% tariff to $50 billion in goods made in China.  The move was in response to Chinese retaliation against the U.S. for tariffs on steel and aluminum imposed by the Trump administration two weeks ago.  The Chinese targeted 128 U.S. products worth $50 billion as a response.  A proposed response by China to the U.S. threat to slap tariffs on Beijing would include $50 billion in American products, including soybeans.

Trade war, anyone?

NPR:

China responded on Wednesday to the Trump administration's published list of Chinese exports that could soon be subject to a steep 25 percent tariff.

The White House list covers some $50 billion worth of Chinese goods in sectors such as aerospace, robotics, IT and machinery.

China's Ministry of Commerce said Wednesday that it would impose tariffs of 25 percent on 106 types of U.S. products worth $50 billion, including soybeans, aircraft and automobiles.  There was no indication of when the new tariffs would take effect.  The Commerce Ministry also said it had opened a dispute against the U.S. at the World Trade Organization.

"It must be said, we have been forced into taking this action," a deputy commerce minister, Wang Shouwen, said at a news conference, according to The Associated Press.  "Our action is restrained."

China's commerce ministry said it has initiated a World Trade Organization dispute procedure against the U.S. 301 tariffs investigation on Wednesday, amid an escalating trade dispute between the world's two largest economies.

Last month, President Trump directed his trade advisers to develop the list as a way to punish China for what the White House calls unfair treatment of American intellectual property.  Trump has also ordered his treasury secretary to weigh new limits on Chinese investment in the United States.

The list of tariff targets was made public after the market closed on Tuesday.  News of retaliatory tariffs from China on $3 billion worth of U.S. goods contributed to sharp sell-off on Wall Street Monday.

The administration will solicit written comments on the proposed tariff targets through May 11 and hold a hearing on May 15. Supporters and opponents began weighing in as soon as the list was released.

China appears to be in no mood to give an inch, while Trump seems equally committed to punishing China for its unfair trade practices.

So where does it end?

It may end sooner than we think.  Trump could modify the list of Chinese goods subject to tariff, which would allow the Chinese to also pull back a bit.  Meanwhile, you have to think there are some back-channel negotiations going on to prevent a ruinous trade war.  Trump is enough of a realist to know he will never get everything he wants in trade concessions from a communist country that has an iron grip on its economy.  But he has shown he is dead serious about changing the way the U.S. and China do business, which could lead to concessions from China.

Meanwhile, the markets are jittery, and other nations are watching closely.  If Trump's goal was to change the conversation about international trade, he certainly has everyone's attention.