Pompeo confident USA will win China trade war

China reached into the U.S. heartland in its escalating trade war over President Donald Trump's tariffs, using an advertising supplement in Iowa's largest newspaper to highlight the impact on the state's soybean farmers as "the fruit of a president's folly".

The response, which came just over an hour after the USA imposed new duties on US$200 billion in Chinese goods on Monday, underscores a deepening gulf between both governments in a dispute that observers say is less about a row over a bilateral goods deficit and increasingly about a USA desire to put the brakes on China's economic ascent.

Beijing's retaliatory tariffs on US$60 billion of USA goods were set to go into effect soon after the U.S. action, the Chinese Ministry of Finance said last week.

China's President Xi Jinping and US President Donald Trump are engaged in a bitter trade dispute.

Trade talks between China and the U.S. are impossible with Washington "holding a knife" to Beijing's neck, the Chinese deputy commerce minister said. The two nations had already slapped tariffs on $50 billion worth of each other's goods earlier this year.

U.S. exporters would "certainly" be hurt, Wang said, echoing an editorial in the state-backed Global Times on Tuesday which said: "China is a big and powerful nation, so whether it is a confrontation with China economically or militarily, it would come at a huge price".

"The trade war is now a reality", said Fitch economist Brian Coulton.

The latest round of escalating tariffs on Chinese imports took effect today, meaning thousands of products may cost more. A senior White House official said last week the U.S. will continue to engage China, but added there was no date for further talks.

The US$330 million contract would see the US ship standard spare parts for several aircraft including the F-16 fighter and the C-130 cargo plane, the State Department said in a statement. Previous year the US spent $3.15 billion on them.

FILE - Chinese-made children shoes carrying a Chinese map and USA flags are on display for a sale at a shop in Beijing, July 13, 2018.

"Protectionist US trade policies have now reached the point where they are materially affecting what remains a strong global growth outlook", the agency said in a report Friday.

"The US-China trade war has no clear end in sight".

Hopes for talks to resolve the issue appeared to have been dealt a blow as The Wall Street Journal reported Beijing cancelled the visit of a negotiating team expected September 27-28 in Washington. That comes just weeks after tech giant Apple unveiled its new product line, which includes an updated smartwatch that has drummed up consumer interest.

The US companies now have to pay 25 percent tax for steel and 10 percent tax for aluminum if they want to import from those countries, according to Trump's new tariffs.

"As such, it is an attractive prospect for other countries including the United States to coexist with China peacefully,"said the newspaper, which is published by the ruling Communist Party's People's Daily".