US, China enter tense stand-off as trade war looms

The first shots have been fired in a trade war between the US and China that threatens to affect us all.

A stroke of a pen could have brought the wrath of China onto the United States as President Donald Trump signed an executive order bringing in tariffs on trade with the country.

"This is number one, but it's the first of many," Donald Trump said.

Mr Trump has made good on his election promise to confront China - and reduce the US$500 billion trade deficit between the rival superpowers.

"It is the largest deficit in the history of the world, it's out of control," he said.

On Friday  (NZ time) he announced $60 billion in sweeping tariffs on imported Chinese goods, targeting around 1300 products, many coming from strategic, high-tech sectors. 

The US President claims China has for years engaged in unfair trade practices that have hurt US firms.

The US tariffs won't kick in for 60 days, to allow for negotiations - but China appears in no mood to talk.

It retaliated on Friday afternoon with plans for more than $4 billion in tariffs on US pork, aluminium, wine and other products.

China's commerce ministry said it won't sit idly by while its legitimate interests are harmed and will take all necessary measures to resolutely defend them.

The country could also take further measures, such as targeting US agriculture - 60 percent of US soya beans are sold to China.

"If the US purchases whatever it wants, on the one hand, but refuses to sell China products we want, and continues to blames us for the trade imbalance, is it fair?" said Chinese Foreign Affairs Spokeswoman Hua Chunying.

Both countries are vital for New Zealand exporters - China is the biggest export destination while America is fourth on the list.

Speaking from China, Trade expert Stephen Jacobi says New Zealand businesses shouldn't panic just yet.

"They need to watch for what the two countries actually do - and not what they say they're going to do," he said.

Trade Minister David Parker spoke to NZ Ambassador's in Washington this morning and was told the situation is a "moveable feast".

"An international trade war is in no one's interest. It's certainly not in New Zealand's interest," he said.

New Zealand - like the rest of the globe - now watching a standoff between the world's two biggest economies unfold.