What are we hearing?

Well what we do know is that the European Union basically is going ahead or will go ahead with about 48% tax on those Chinese EVs and there is said to be through state media as well as hints from the Chinese government that there's going to be retaliatory action, probably more targeted this time, much like what China deployed against Australia.

And that is against alcohol items and foodstuffs, products that China can source elsewhere.

So if they levy these tariffs on Europe, here are some of the areas that would hit Europe the hardest.

I just mentioned about alcohol, well France is the biggest producer of brandy, wine could also be targeted in those Mediterranean nations, particularly France, Italy and Spain would be hit very hard.

Brandy, Beijing already announced a probe back in January, an anti-dumping probe back in January, which could take a year or so to be fulfilled but that does not mean Beijing could not in the interim impose preliminary tariffs, much like what it did on the Australian wine sector when it launched a probe there.

Then of course France is China's second largest brandy export market so it would hit France quite hard.

That would also play out as well for wine, I mentioned Australian wine but of course France, Italy and Spain, big producers and wine right now is at a historical global glut.

So again, other producers could fill the void there.

Now pork, Spain is the number two market to, China is the number two market for Spain in pork, that could be targeted.

Also dairy, that would hit Denmark.

And then cars, we're already hearing from state media saying that the Chinese car makers are pushing Beijing government to employ about a 25% tax on large engine European cars.

That's going to hit Germany pretty hard.

There's a reason also that these measures are targeted, right?

Are there any products that China might avoid retaliation because they actually need those items?

Sure, I'm sure there's going to be an exclusion list and in particular let's bring up airplanes.

Airbus is one of two main suppliers globally obviously and also look, the Chinese right now are said to be in negotiations for about 100 new wide body aircraft from Airbus.

Those are not the single aisle planes that they assemble in Tianjin.

They would have to buy them from Europe.

They're not about to put a tax or tariff on items that they're about to buy and import into China.

Also, any penalty against Airbus would be a benefit to Boeing.

We all know that Boeing and China right now have their difficulties and the US and China are in that trade spat as well.

So this is an area that would probably not see tariffs at this time.