It looks like Beijing and Donald Trump are playing poker with the US President’s 10% duty on Chinese exports to the USA, raising his move with a 15% duty on some US products into China.

And it looks like we’re seeing what I call the De Niro play that goes: “If you mess with me, I’m going to mess with you.”

According to CNBC, China “will impose additional tariffs of 15% on coal and liquefied natural gas imports from the U.S. and 10% higher duties on American crude oil, agricultural machinery and certain cars, starting February 10”.

Beijing is taking to moral high ground that most countries and economists would support arguing that the imposition of additional levies of 10% by the U.S. “seriously violates the rules of the World Trade Organization ... destructs the normal bilateral economic and trade activities”, the CNBC report revealed.

But wait, there’s more, showing China isn’t in a capitulation mood like we saw with the Mexicans and Canadians. Beijing has also imposed export controls on a range of items and technologies related to certain critical minerals, including tungsten, tellurium, ruthenium and molybdenum.

The Chinese leadership isn’t finished yet, also announcing an investigation into Alphabet, the owner of Google, for anti-monopoly breaches. And experts don’t see any quick backdowns between China and the US.

“The overarching geo-economic dimensions to U.S. China trade means that resolution will be far more fraught than is the case with Mexico and Canada,” said Vishnu Varathan, head of macro research for Asia ex-Japan at Mizuho Bank.

Interestingly, Wall Street isn’t overreacting to the news that China isn’t copping its tariff slugs without a fight.

Ahead of the close, the Dow Jones index was up 143 points (or 0.32%), the S&P 500 was up 0.7% and the Nasdaq, which hosts Alphabet on its index, was up 1.26%.

Alphabet’s share price was actually up 2% to US$205.29, indicating that investors aren’t yet rattled about this developing China-Trump trade war.

Ultimately, we are awaiting President Trump’s response but, right now, the market is seeing this as the two biggest economies in the world with the two most powerful leaders on the planet facing off, with the hope being both men won’t go too far.

Right now, the stock market is betting that a deal will eventuate. Let’s hope the market is getting this right. In July 2018, Donald Trump slapped tariffs on China and a trade war went on until 2020, before Covid shocked the stock market. And while share prices did drop on some of the tariff-related battles between the two countries, the overall market rose close to 20%.

I see any market convulsions linked to this looming, global, tariff poker game as a chance to make money, but there could be some volatile days for stocks. However, that’s when the brave or the experienced can pick up good companies at lower prices.