Global markets slide as Donald Trump imposes first $71 billion of tariffs in trade war with China

US President Donald Trump fired the first US$50 billion of tariffs in his trade war with China. Photo / AP

Donald Trump has fired the first US$50 billion ($71.9b) salvo in his trade war with China, slapping a 25 per cent tariff on hundreds of products and sending global markets sliding.

Beijing immediately retaliated yesterday as officials promised to respond in kind with "countermeasures of the same scale and strength".

Trump said he had been forced to act by China's alleged theft of intellectual property from US firms and despite his "great friendship with president Xi", according to the Daily Telegraph.

The US imposed levies on 818 Chinese products worth US$34b to come into force on July 6.

An additional list of 284 imports worth US$16b has also been put forward, to be enforced after consultation with business.

Medical equipment, aircraft navigation tools, lubricants, plastics and metal parts are all included in the first tranche.

The items deliberately target state-subsidised industries that form part of China's 2025 economic goals.

In retaliation, China said it would impose tariffs on 545 US products, including cars and agricultural products such as soya beans, beef and pork.

The trade row was sparked by a so-called 301 investigation into the theft of US companies' intellectual property by Chinese counterparts.

Along with the US, Japan and the EU have issued cases against China on this issue with the World Trade Organisation.

Trump said that the tariffs "are essential to preventing further unfair transfers of American technology and intellectual property to China, which will protect American jobs." He added that any tit-for-tat measures would -result in "additional tariffs".

Beijing was undeterred and said it would match the attack. Its commerce ministry said: "Launching a trade war does not accord with global interests."

"China definitely does not want a trade war, but in the face of the US's malicious, harmful and short-sighted conduct, China has to impose powerful countermeasures and resolutely defend the national interest and the people's interests," it said.

Trump's initial list of targets is shorter than a draft list of some 1,300 products published in April.

Some items that were commonly bought by consumers, rather than used in industry, including flat screen televisions and mobile phones were removed from the American list.

Moody's, the credit ratings agency, said that the US move and Chinese response "pose a broader challenge to the global trade regime, particularly in the context of growing US trade tensions with other trading partners".

The global economy could be derailed if trade concerns upset confidence, according to the International Monetary Fund, the world's lender of last resort.

In recent weeks the US has also -imposed tariffs of 25 per cent on steel and 10 per cent on aluminium on traditional allies the EU, Canada, Mexico, and Japan.

Thomas Donahue, president of the US Chamber of Commerce, said: "If these actions continue, our businesses will lose customers, workers will lose jobs, and American consumers will lose family income through higher taxes and higher prices."