And China has already said that it would respond with measures of a "corresponding number and quality" if the US goes ahead with that. This is where the real tit-for-tat escalation starts, and it's hard to see how it can be stopped. Trump is trapped by his rhetoric, and China's President Xi Jinping is trapped in two ways.
One is that Trump has already imposed big new tariffs on exports to the United States by the European Union and by America's closest neighbours, Canada and Mexico. They have all responded by imposing similar tariffs on American exports of equal value.
Xi can hardly do less, even if China's real interests might be better served by not responding in kind to the new US tariffs. He would not wish to be seen as weaker than Canada's Justin Trudeau.
The other factor weighing on Xi's decisions is that Beijing is starting to see American trade policy as part of a deliberate attempt to stop China's emergence as a great industrial and technological power and a real peer rival to the United States.
China's exports to the United States amount to about 40 per cent of its total exports, whereas only 5 per cent of US exports go to China, so an all-out trade war between the two countries would obviously hurt China more. President Xi, however, is far more able to ignore the resultant job losses and higher prices than Trump is - especially because the Americans who were hurting worst would be his own political "base".
Or, alternatively, China's heavily indebted economy may turn out to be even more fragile than it looks - in which case a trade war could drive the country into a deep recession and drag the whole world economy down with it. There's a reason that trade wars went out of fashion after World War II, and it wasn't just because international trade tends to enhance prosperity overall. Back when trade wars were the normal way of doing business internationally, in the 16th-19th centuries, the European powers spent almost half their time at war.
The first great era of free trade, circa 1870-1914, was also the "Long Peace", when no European great power fought any other for almost half a century. That peace was destroyed by World War I (so free trade does not prevent all wars), but the trade wars of the 1930s certainly deepened the Great Depression and facilitated the rise of fascism and a second world war.
And then came the Second Long Peace, from 1945 to the present, when once again free trade reigns and the great powers never fight one another directly.
I'm not saying that Trump's assault on free trade is going to lead us back down the path to great power war again. But he may be putting one of the key factors back into place.
