Report: China vows to retaliate against US with tariffs on 545 American goods

WASHINGTON (KGO) -- It seems we are about to be in the midst of a trade war with China which, financial experts say, will likely have a negative effect on California. Today, President Trump announced the U.S. will be imposing a 25 percent tariff on 34 billion dollars worth of Chinese goods by July 6 and another 16 billion later. China has already said it will retaliate.

It's well known that China has been stealing American technology and trade secrets for years.

RELATED: Trump administration announces tariffs on $50B in China imports

By imposing a 25 percent tariff on hundreds of Chinese products, economists say the Trump administration is punishing China.

"It's more like punitive and they are targeted punitive, saying you can steal stuff, it's cheaper when you steal stuff but we're going to make it more expensive for you to sell," said John Veitch, a finance professor at the University of San Francisco.

The tariffs will focus on areas of aerospace, robotics, and machinery.

"It can no longer play by the rules that it did when it was the 10th or the 11th largest economy of the world. It's now the 2nd largest economy in the world and it's trading patterns affect everyone in the world," expressed Jason Clark, chairman of the San Francisco Republican Party.

RELATED: Backlash from allies, business associations over steel and aluminum tariffs

China's Commerce Ministry responded. "We will immediately introduce taxation measures of the same scale and with the same intensity. All of the economic and trade achievements previously negotiated by the two parties will also be invalid."

"When the price of a car goes up or a refrigerator or whatever goes up, people buy less of them and so you worry about losing jobs in other industries, said Professor Veitch

History has taught us that a trade war is not good for the U.S. In 1930 the Smoot-Hawley Tariff Act was passed raising tariffs on 20 thousand imported items.

Here's what happened to the U.S. Unemployment Rate:

--In 1930 when that tariff when into effect unemployment was at 8 percent.

--The following year, 1931 it went up to 16 percent

--And in 1932-33, it increased to 25 percent

A month ago, after President Trump increased tariffs on Chinese steel, that country retaliated by refusing to buy some US imports, the wine and agriculture industries in California are beginning to feel the impact.

"We are the 5th largest economy in the work and tariffs are going to impact our economy, going to impact our jobs, impact the price of goods, this is not good for anyone, " said David Chiu, California assembleman.

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