On Friday, China's response to Donald Trump's 34 percent increase in import tariffs against the country.

China is targeting an import tariff of the same percentage against American goods.

– That's what many had imagined China would do after the Qing Ming Festival holidays. But they have already gone out. They haven't waited, it has happened very quickly, says Stefan Brehm, senior lecturer and researcher in China, economics and national economics at Lund University.

"China did it wrong, they panicked – the one thing they can't afford to get," Donald Trump commented on the Chinese retaliatory tariffs in a post on its platform Truth Social.

China's second weapon in the trade war

In addition to tariffs, other tools may be included in China's response package - which could be painful for the American economy.

– Among other things, there is talk in the Chinese media about restricting the export of rare earth metals and minerals. This is something that may hit American industry very hard. Another part is to investigate the products of American agricultural companies, it seems to be mostly about chicken, which is accused of being substandard and dangerous to health. Then they will review the import of goods that harm their own industry, such as medical products, says Brehm.

– There is a whole range of different things they use that are embedded in industry, politics and security policy.

He finds it interesting to compare the response with how the EU chooses to handle Donald Trump's"punitive tariffs".

– What China is doing is trying to increase the cost for the US incredibly to put pressure on Trump and get a better negotiating position. While the EU should negotiate first. Actually, it would have been smarter if everyone had the same strategy. But of course, that has to do with the EU not seeing China as a partner but almost as an enemy.

“Now no one can back down in this”

With the new tariff increases, the US now has import tariffs of 54 percent on Chinese goods.

Why is China imposing the same percentage as the US, why aren't they stepping up?

– I think they want to make a point that they are not really escalating but are just responding. They think this is wrong. Then it is a simple and straightforward message to use the same percentage. The message is: We pay with the same coin, no more, no less.

It is difficult to predict which of the major powers will lose the most from the trade war that is now expected to escalate.

– They will probably go quite far in this and you don't know who will go on their knees first. I would guess that it will be very expensive for both sides until it is possible to negotiate. Now no one can back down in this. But in two or three months it may look different, says Stefan Brehm.