There are no bullets or bombs, but trade wars have real casualties

China flag and the U.S. Stars and Stripes fly on a lamp post Pennsylvania in Washington

China flag and the U.S. Stars and Stripes fly on a lamp post Pennsylvania in Washington

China accused President TrumpDonald John TrumpEx-CIA chief Brennan compares Trump to Bernie Madoff Timeline: The controversies of Scott Pruitt Warren: Trump should have fired Pruitt "28 scandals ago" MORE on Friday of starting "the biggest trade war in economic history" by slapping billions of dollars' worth of tariffs on Chinese goods.

A China central bank adviser said the planned USA import tariffs on $50 billion worth of Chinese goods - $34 billion plus a planned follow-on list worth $16 billion - will cut China's economic growth by 0.2 percentage points, although the overall impact would be limited, the official Xinhua news agency reported Friday.

Hours after Washington introduced 25 percent trade tariffs on $34 billion worth of Chinese goods, Beijing retaliated with mirror measures against American imports.

The Chinese side sees Trump's threats as an attempt to hold back its economic growth - and has vowed to match them move for move. Japan's Nikkei 225 index gained 1.4 percent while the Shanghai Composite index jumped 0.7 percent and Hong Kong's Hang Seng surged 0.8 percent.

The foreign ministry in Beijing said retaliatory measures "took effect immediately" with state news agency Xinhua confirming they were also 25-per cent tariffs on an equal amount of goods.

Despite the looming trade war between China and the US, flags for US President Donald Trump's re-election campaign are under production in China as told by Li Jiang, a Chinese flag manufacturer.

US tariffs on $34 billion in Chinese imports took effect as a deadline passed on Friday, with Beijing saying it had no choice but to respond in kind, as the two trading giants escalated a bitter row.

China's tariffs on hundreds of US goods include top exports such as soybeans, sorghum and cotton, threatening USA farmers in states that backed Trump in the 2016 US election, such as Texas and Iowa.

President Trump announced the tariffs in June and since then the USA and China have been locked in a series of threats and negotiations that have rattled markets.

Mark Cohen, director of the Berkeley Center for Law and Technology and an expert on China, says this all started as a dispute over accusations of Chinese theft of intellectual property, but the Trump administration has expanded and escalated it.

Chinese officials reject accusations they steal or force foreign companies to hand over technology.

"China will never fire the first shot", Gao said. "Any unilateral pressure will be futile".

"China is the largest trading partner with the Port of Oakland and our exporters and importers are concerned about the potential effect of a trade war", said Mike Zampa, the Port of Oakland Communications Director.

The Trump administration is "behaving like a gang of hoodlums", it says.

This will be affected by how high individual tariffs are, and also if they are expanded to other countries like Canada, Mexico and the European Union. Beijing has said previously it would fire back against an equal value of U.S. exports, including SUVs, meat and seafood.

Gao also dismissed concerns that American companies operating in China will be targeted during the trade frictions, saying the Chinese government will protect the legitimate rights and interests of all foreign-funded companies.

Beijing has accused the United States of "firing on the whole world" with the measures, pointing out that most of the Chinese exports under attack are largely made by companies with foreign investment - including from America.

"There's a viewpoint that's shared across the government, and certainly at the White House, that there's going to be pain that U.S. industry is going to have to suffer in order to change China's behavior", Brzytwa said by phone.

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