The US has imposed tariffs valued at £25bn on Chinese goods - as well as on imports from Canada and Mexico. Beijing has vowed to retaliate with its own tariffs on US soybeans and other farm products in a direct shot at US President Donald Trump's supporters in America's heartland.
The European Union (EU) on Friday levied tariffs on estimated $3.2 billion worth of American goods, in retaliation for tariffs US President Donald Trump's tariff imposition on imported steel and aluminium.
"We do not want to be in this position", EU Trade Commissioner Cecilia Malmstrom said in a statement, adding that the "unilateral and unjustified" USA decision had left the EU with no choice.
It had previously registered the move with the World Trade Organization (WTO). So the size of the tariff would dwarf the steel and aluminum tariff, which hit a little over $7 billion worth of European Union exports to the US.
The U.S. tariffs hit some $7.5 billion of European products; the EU says that today's measures target almost half that figure, and that it plans to impose a slightly larger block of tariffs later - either in three years, or if/when the WTO rules in its favor.
Mexico placed tariffs on American products ranging from steel to pork to bourbon two weeks ago.More news: May suffers defeat in House of Lords on Brexit bill
Some of the products chosen are created to target the states controlled by Republicans, who are seeking to retain control of both chambers of Congress in November elections.
They also threatened a second round of tariffs on some $4.3 billion worth of U.S. products if the dispute was not resolved. Trump is also looking at new tariffs on auto imports, opening a new front in the trade war.
"No, because the USA is both an important export market and a strong production base for us", Mattes said.
That hands the Chinese side room to impose penalties such as Customs delays, tax audits and increased regulatory scrutiny.
South Korean and Japanese companies have all felt this effect, with their businesses in China hurt as part of a dispute between states. "The logic of that is what companies throughout the country are feeling".
In total, the USA imported over $43 billion worth of vehicles for the transportation of people in 2017.
Mattes also said that German automakers could not subsist without access to the USA market.