China already has announced it will respond in kind on the same schedule as the United States while President Donald Trump has countered with a threat to double down by progressively ratcheting USA penalties up to a total of $450 billion in goods - which would represent the lion's share of all of China's exports to the United States.
At a separate press briefing on Thursday, Chinese Foreign Ministry spokesperson Lu Kang said that China stood with the rest of the world in opposition to unilateral trade actions and would do what is necessary to protect its interests. Longer-term trends are a factor, but uncertainty over trade is taking a toll, analysts say.
Just days before the first 25-percent levy is slated to hit $34 billion in Chinese products, US companies here say they're already feeling the sting in the form of stalled product approvals, worker visas and licensing applications. Americans worry that rising Chinese technological prowess might erode US industrial leadership and prosperity.
German autos BMW (BMWG.DE), Daimler (DAIGn.DE), Porsche PSHG_P.DE and Volkswagen (VOWG_p.DE) were among the biggest STOXX risers, up as much as 4.7 percent following a report about a USA offer to suspend threats to impose tariffs on cars imported from the European Union.
Ningbo Top East Technology Co., which makes soldering irons in Ningbo, south of Shanghai, used to export 30 per cent of its output to the United States, according to its general manager, Tong Feibing.
It fueled the wider European auto sector's best day in more than two years with the mood also been helped by a stronger-than-expected jump in German industrial orders after four months of falls. At least one pork producer has said it could be put out of business.
"If these tariffs are added, then we will definitely have to adjust (our prices) a little", said Zhao Yanmei, an assistant manager at a branch of Jenny Lou's worldwide supermarket chain in northeast Beijing. "I will do whatever I can, including layoffs". As an example, Chinese companies are reselling US soybeans, and Chinese companies are expected to cancel most of the remaining soybeans they have committed to buy from the U.S.in the year ending August 31, once the extra tariffs take effect.
China is expected to impose retaliatory tariffs on 545 high-value American exports, such as soybeans, seafood, SUVs and crude oil.
But officials in Beijing say China is prepared to do what's needed to safeguard its national interests.
"Although we do not believe China will weaponize its currency, we do believe the current trajectory of Chinese yuan depreciation is justified", strategists at Bank of America Merrill Lynch wrote in a note.
The tariffs come at a time, however, of slowing growth and rising debt in China after more than three decades of almost uninterrupted expansion. "Perhaps the Trump administration can only clear its mind after a fight".
"Combining this with China's promise to retaliate against US products and agricultural commodities only further erodes the benefits of last year's tax reform, hurting the entire USA economy", Slater said.
China responded with a statement saying it would fight back with "equal scale, equal intensity". "They are a vital trading partner, and we need to continue to do business with China without the sting of these tariffs".
Soybean farmers, along with most of the US agriculture community, have been appealing to Trump to defuse the trade conflict with China, which imported 31 percent of USA soybeans past year, making it the world's top purchaser.
That would slow his research.
Xi has vowed to guide China's rise as a modern superpower in what he calls the "great rejuvenation of the Chinese nation" based on the state-led industrial policy that is at the heart of the trade and technology disputes with Washington.
The office of the US Trade Representative directed Customs and Border Protection to begin collecting duties on Chinese imports starting at midnight Friday.
"An open trade war with the USA, which now seems imminent, would put a damper on China's push to straighten up its economy and to increase its global economic and geopolitical influence", Prasad said.