China has fired the first shot in a renewed trade war between Beijing and Washington, D.C.

Beijing has warned President-elect Donald Trump against increasing tariffs on Chinese goods or risk inflicting losses on the American economy.

During his campaign, Trump threatened to slap 60% tariffs on all Chinese exports, which would be a blow to China’s economy. Tariffs are a core component of Trump’s “America First” economic policy, which aims to protect U.S. industries and promote growth.

His strategy that the economy was performing poorly under the Biden-Harris administration resonated with voters and helped to propel him back to the White House.

Liu Pengyu, spokesperson for the Chinese Embassy in the U.S., told Newsweek in an exclusive statement that intensified trade tensions could lead to negative outcomes for both nations.

“There is no winner in a trade war, nor will the world benefit from it. Further increasing tariffs on Chinese products will only significantly drive up the cost of imported goods, inflict more loss on American companies and consumers, and will eventually backfire,” he said.

Newsweek contacted the Trump campaign for comment via email.

The President-elect and China have already gone toe-to-toe in a tense trade war initiated during Trump’s first term as U.S. president. He imposed sweeping tariffs on Chinese imports, a move quickly met with retaliatory tariffs from Beijing.

China, the world’s second-largest economy, is better equipped to handle a second trade war with the incoming Trump administration, experts told Newsweek.

Wendy Cutler, vice president at the Asia Society Policy Institute (ASPI), a think tank, told Newsweek: “China is in a much better position this time to handle a potential trade war with the United States.

“Beijing has taken steps to reduce its reliance on U.S. imports, including pouring money into making its domestic industries more competitive and innovative. It has also bolstered trade with ASEAN, African, and Latin American countries as part of its trade diversification strategy. That said, bilateral trade with the U.S. is still close to $600 billion, so a new round of Trump tariffs would still hurt both economies.

“A new wave of Trump tariffs will rekindle inflation, cause supply chain reductions and potentially slow U.S. economic growth.

“Given the enormous potential economic costs to the United States of a new trade war with China, the Trump team should consider targeted tariff increases on strategic products versus an across-the-board tariff hike, which will raise prices on countless items for U.S. consumers.

Inu Manak, a trade policy fellow at the Council on Foreign Relations (CFR), told Newsweek a trade war would harm the U.S. economy.

“It is likely that China has already prepared a list of retaliatory tariffs if Trump imposes higher tariffs. The last time Trump was in office, China targeted U.S. agriculture, which was quickly noticed by farmers and ranchers,” she said.

“A renewed trade war would certainly harm the U.S. economy, and its impact will be felt in the United States. Depending on the size and scope of the tariffs, the impact could vary. Tariffs will also have an inflationary impact, perhaps not the best policy choice when voters are frustrated with inflation.

“A trade war should be avoided because of the high domestic costs and potential to increase uncertainty in the global economy. There are legitimate concerns with China that should be addressed, such as its high levels of state subsidization in the economy, but tariffs will not solve that.

“The United States should work to discipline China’s behavior at the World Trade Organization by asking China to fully live up to the commitments it made in its accession protocol.”

Meanwhile, Canada’s financial bodies are preparing for the possibility of increased tariffs under a second Trump administration. The Canadian Chamber of Commerce emphasized the need for the government to support businesses in adapting to potential changes in trade with the U.S., Canada’s largest trading partner. Trump has proposed raising tariffs, including a 10 percent general rate for all countries.

What Happened in the First Trade War?

The U.S.-China trade war, which began under the Trump administration in 2018, marked a major turning point in relations between the world’s two largest economies, pitting Washington against Beijing in an economic conflict.

Driven by allegations of unfair Chinese trade practices and a large trade imbalance, the Trump administration imposed sweeping tariffs on Chinese imports, prompting Beijing to retaliate.

The conflict, which disrupted global supply chains and increased costs for American consumers and businesses, has had lasting implications for international trade and diplomacy.

Frustrated by years of unfair Chinese trade practices, the Trump administration argued that Beijing’s policies—including alleged intellectual property theft, forced technology transfers, and industrial subsidies—had cost the U.S. economy dearly, impacting American industries and workers.

Key to the Trump administration’s strategy were tariffs on hundreds of billions of dollars of Chinese goods, initially targeting core materials like steel and aluminum before expanding to a wide range of consumer products.

Beijing responded in kind, imposing retaliatory tariffs on American products, particularly agricultural exports, which sharply impacted U.S. farmers and producers.

This tit-for-tat exchange not only strained relations between the two superpowers but also sent ripple effects through global markets and supply chains, raising costs and uncertainty for businesses and consumers worldwide.

In addition to tariffs, the Trump administration took aim at China’s long-standing trade surplus with the United States, viewing it as evidence of an unbalanced economic relationship.

The administration’s criticism extended to China’s technology sector, leading to restrictions on prominent companies like Huawei and ZTE over national security concerns. As U.S. officials pressed for structural changes to China’s economic practices, Beijing resisted.

In 2020, after nearly two years of intensifying tariffs, the two countries reached a temporary truce with the “phase one” trade deal. The agreement required China to commit to purchasing $200 billion more in American goods over two years and included new measures to safeguard intellectual property.

Yet the deal fell short of resolving many fundamental issues, and the onset of the COVID-19 pandemic further complicated its terms and outcomes.

Though the Biden administration has maintained several of Trump’s trade policies toward China, the trade war initiated under Trump has reshaped the U.S.-China economic relationship and signaled a shift toward a more confrontational and competitive approach.

As the trade war’s impact unfolds, both nations remain locked in an uneasy standoff, with global markets and the international economy closely watching each move.