Fears of a trade war between the world's two largest economies have driven declines in US stock futures today, sinking European and Asian stocks. China announced today that it will match the scale of US tariffs announced yesterday by imposing an additional 25% tax on nearly $50 billion of US imports, including soybeans, automobiles, chemicals, and aircraft. The decision responds to the Trump administration's latest offensive based on alleged intellectual property infringements by China. The dispute, based on a $375 billion imbalance in goods trade favored by China, prompted the trade attack on high-tech sectors that Beijing sees as the future of its economy, prompting an angry backlash. Beijing's proposed targets, meanwhile, strike at the core of the two countries' trade relations and at some of the most politically sensitive goods in Trump's core constituencies. For example, China is the world's largest importer of soybeans and the largest buyer of US soybeans; this trade was valued at nearly US$14 billion in 2017.
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