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What Is the Endgame for the Trump Trade Wars?

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"With the announcement from the U.S on the Chinese tariffs, the reaction on the policy side from China will be the key event to watch in the coming days", said Shinichiro Kadota, senior FX strategist for Barclays in Tokyo.

Chinese retaliation: China has threatened to retaliate dollar-for-dollar if the Trump administration imposes a new round of tariffs.

The president last month asked the US Trade Representative's office to identify US$200 billion of Chinese goods that could be hit with 10 per cent tariffs.

Accusing China of not negotiating "seriously" on trade, the Trump administration has released a list of products it wants to impose a ten percent tariff on, amounting to $200 billion.

The Aussie, considered a liquid proxy for China-related trades, fell 0.5 percent against the dollar to US$0.7418. It's an extensive list of over 6,000 goods that include seafood, propane and toilet paper, among many other things.

It also said that China would have to respond to the USA actions.

The U.S. imposed an initial round of 25% tariffs, applying to $34 billion in imports, as part of a $50 billion tariff plan.

The Commerce Ministry on Wednesday gave no details, but Beijing responded to last week's USA tariff hike on $US34 billion ($A46 billion) of imports from China by increasing its own duties on the same amount of American goods.

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ANALYST'S TAKE: "Given the magnitude and breadth of the tariff list, the impact is expected to ripple through supply chains and cause collateral damage on regional economies", Zhu Huani of Mizuho Bank said in a commentary.

Chinese tariffs have already taken a toll on US exports such as soybeans, which raises questions about the possible political repercussions President Trump could face from farmers who supported him in the 2016 election.

China's Commerce Ministry slammed the latest United States threat as a "totally unacceptable" escalation of their dispute and promised to protect its "core interests".

Members of Congress are increasingly questioning Trump's aggressive trade policies, warning that tariffs on imports raise prices for consumers and expose USA farmers and manufacturers to retaliation overseas.

"For over a year, the Trump Administration has patiently urged China to stop its unfair practices, open its market, and engage in true market competition", he said in a statement.

"The behaviour of the United States is hurting China, hurting the world, and hurting itself", a spokesperson for China's commerce ministry said in a statement.

"Right now, world trade is relatively chaotic".

Orrin Hatch, the Republican Senate Finance Chairman, condemned the move as "reckless" and not "targeted", while USA stock index futures fell in early Asian trading.

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