U.S. President Donald Trump announced plans to impose an import tax of 25% on steel and 10% on aluminum. Trump tweeted that “trade wars are good, and easy to win,” claiming that the U.S. loses billions of dollars in disadvantageous deals with “virtually every country it does business with.” The decision is to take effect this week. The measures will affect China, although not primarily. Canada exports as much as 10 times more aluminum to the U.S. than China, and China did not even make the top 10 list of countries exporting steel to the U.S., according to the most recent statistics from the U.S. Commerce Department. Metal imports also did not show up in the top categories of the U.S.Trade Representative’s most recent report on the country’s trade with China. The top groupings were machinery, at USD226 billion, followed by furniture and bedding, at USD29 billion, then toys and sports equipment at USD24 billion, and footwear at USD15 billion. But there is still an investigation ongoing under section 301 of the Trade Act of 1974, specifically targeted at China, which was initiated in August last year.

Beijing is not going to “sit idly” if Washington’s actions damage Chinese interests, and will take “necessary measures,” Zhang Yesui, Spokesman for the National People’s Congress (NPC) warned at a press conference before the opening of the annual NPC session. “China doesn’t want a trade war with the United States, but if the U.S. takes actions that hurt Chinese interests, China will not sit idly by and will take necessary measures,” he said. China’s Ministry of Commerce condemned Trump’s move and said it would work with “other affected countries in taking measures to safeguard its own rights and interests”. The China Iron and Steel Association (CISA) said Chinese exports to the U.S. were limited and the duties would only make American industry less competitive. European Commission President Jean-Claude Juncker said the EU cannot “put our head in the sand” and promised tit-for-tat measures, saying that the EU may impose tariffs on Harley-Davidson, on bourbon whiskey and on Levis blue jeans imported from the U.S..

The announcement overshadowed the five-day visit of Liu He, Director of the Office of the Central Leading Group for Financial and Economic Affairs, to Washington for talks with U.S. officials. Liu was trying to restart the bilateral Comprehensive Economic Dialogue and persuade the U.S. to back away from punitive action against China’s intellectual property practices. Although Liu He could not prevent a further escalation of trade disputes, the U.S. and China still agreed to hold further trade talks in Beijing soon.

The Trump Administration earlier last week said it will slap duties of 84.9% to 106% on exports of aluminum foil to the United States. All except two Chinese foil exporters will also have to pay countervailing duties of 17.1% to 20% on exported products deemed to have enjoyed “financial assistance” from the Chinese government.

Before the announcement of new U.S. import tariffs on steel and aluminum, China had announced the removal of anti-dumping and anti-subsidy duties on imports of white-feathered broiler chickens from the U.S. The move is largely inconsequential for the American poultry industry, as China’s 2015 ban on imports of U.S. poultry, poultry products and eggs due to avian influenza remains in place.

As a result of the new U.S. measures, China is expected to retaliate with new import duties on U.S. exports. It has already launched an investigation into U.S. imports of sorghum, and is studying whether to restrict shipments of U.S. soybeans – targets that could hurt Trump’s support in farming states. The tariff measures could also derail a USD250 billion package of business deals – many of them non-binding MOUs – announced when U.S. President Donald Trump visited Beijing in November.