A fresh trade war between the US and China has just kicked off.

An hour and a half ago, the US went ahead with its promise of 10% tariffs on all Chinese goods headed to the US.

China quickly responded and announced it's to do the same in a tit-for-tat spat that could impact the global economy.

China's finance ministry is saying the measures against US goods would take effect next Monday.

An extra 10% tax will be added to goods, including crude oil and agricultural machinery.

Imports of coal and liquefied natural gas will be hit with 15% tariffs.

It's also saying it's filing a complaint with the World Trade

Organization over the action from the US.

In Asia, stock markets were riding high earlier today, with Hong Kong's Hang Seng opening up over 3% higher than Nikkei 225 in Tokyo was up more than 1.5%.

But since the announcement of new tariffs in the US and China, the markets are now muted.

On Wall Street, heavy losses were clawed back on Monday as the news broke that 25% tariffs on Mexico are to be delayed for a month.

Hours later, a similar deal was announced with Canada after President Trump spoke to Canada's Prime Minister

Justin Trudeau.

And Canada agreed to ensure further security at its border.

Our North America business correspondent, Michelle Fleury, is in the town of Windsor, Ontario, in Canada.

It's right by the US border, where she's been getting reaction to all these latest developments.

In response to the threat of tariffs, some Canadian liquor stores have pulled US brands from their shelves.

Tonight, they are being restocked.

The trade war averted for now.

But for some, the break may be permanent.

For me, a line's been crossed.

Monica Morelli cancelled subscriptions to Amazon and Netflix, two American companies, because of Trump's trade threats.

She isn't planning to sign back up.

It's like the whims of someone who changes from day to day.

It's not acceptable.

And for me, I think it's broken something.

I can't trust the US to be the ally anymore.

At Laval, they make parts used in other goods.

They were bracing for the worst.

Around 80% of Canada's exports end up in America.

Even with the delay, Laval president,

Jonathan Azzopardi, said questions remain.

The uncertainty is as bad as the tariffs.

This company has been in business for over 50 years.

That 50 years of success came from both sides working together, creating relationships that took a very long time to create.

And now knowing that that relationship was as fragile as it is, and that one person's agenda can change that whole relationship and change the course of a business that's been around for half a century, hurts a lot.

Here in Windsor, Ontario, you can see the American city of Detroit just across the river.

Tonight, the feeling of betrayal by a neighbor replaced by a sense of relief.

But for how long?

Michelle Flurry, BBC News, Windsor, Ontario.

Well, Canada's Prime Minister, Justin Trudeau, tweeted he had a good call with President Trump and will be implementing a $1.3 billion plan, reinforcing the border with new choppers, technology, and personnel, enhanced coordination with our American partners, and increased resources to stop the flow of fentanyl.

Nearly 10,000 frontline personnel are and will be working on protecting the border.

Trudeau also said Canada would appoint a fentanyl czar, list cartels as terrorists, and launch a Canada-US joint strike force to combat organized crime, fentanyl, and money laundering.

Moshe Landa is Senior Lecturer of Economics at Concordia University.

I asked him if Justin Trudeau has done enough to keep the threat of tariffs at bay.

Probably.

When Trump was elected, he had texted out that the tariffs were coming unless Canada controlled fentanyl and immigrants crossing the northern border into the US.

I'm not entirely sure how big a problem those two things are or whether they're more imagined in Trump's mind.

But given that there's now going to be much more enhanced border security to try and stop whatever fentanyl and immigrants are crossing, that was the precondition to make the tariffs go away.

So we don't know in 30 days whether he's going to ask for something else or that's going to be the opening part of the negotiation.

But allegedly, what Trudeau offered today was what he wanted.

In the meantime, Moshe, what are you hearing about how people are positioning themselves in the light of this potential conflict?

Consumers are upset.

They've started boycotts.

I'm not sure how long the boycotts are going to last or how much they realize does, in fact, come from the US.

But consumers don't like the thought.

And Canadians have a reputation for being kind, hard, and generous people.

But we can also be extremely proud and defensive when our country is under threat.

Businesses, of course, are very concerned, too.

A lot of our natural resource-based industry is powering the US, literally and figuratively.

And so there have been threats that will turn out the lights in the US if they want to tariff us.

I don't think that that's exactly the best strategy.

But that just shows the degree to which Canadians are upset, that one man, as you played in an earlier clip, has the capacity to really wreck the Canadian economy.

So that's the situation in Canada.

But what about China, where 10% tariffs have just been applied to Chinese exports to the US?

And China has just announced its following suit with a raft of tariffs to be applied to American goods.

Dr. Harry Broadman is a trade expert with Rand Corporation and told me this is just the beginning.

It's just that the latest chapter in our relationship with China, I think, really epitomized by how Trump sees China as a mano-a-mano bargaining situation, just like, frankly, he did with Canada and Mexico.

And China is very smart.

They've picked US exports that are very sensitive to US firms.

And you can be sure that those firms are giving an earful to Mr. Trump right now.

Yeah, it'd be interesting to see how this plays out.

President Trump is saying he's going to speak to President Xi later this week.

He had phone calls with Claudia Scheinbaum yesterday and Justin Trudeau of Canada.

That seemed to lead to a good result.

Could we see the same for China?

Sure, and I believe that Xi is expecting that, because now the cat is out of the bag that this is how Trump wants to use tariffs, as a beginning, perhaps, of a discussion.

It's quite extraordinary.

If you're in a real serious trade war, you're not expecting to then get on the phone with the head of state just after you've imposed something.

So I think this is quite orchestrated by the way that Trump sees the world and what he wants to use as a bargaining chip.

And what's also extraordinary is some of the items that are coming up in the trade war are not necessarily economic merchandise items, but other things like the border.

And so it's as if that Trump sees tariffs as his only tool in the toolkit to try to change our policy with respect to other countries.

With Canada and Mexico, some might argue it was quite simple to promise to President Trump what he wanted, i.e.

much more security at the border, many more measures to prevent fentanyl crossing across, et cetera, et cetera.

With China, it's not so simple, is it?

Absolutely not.

I mean, our supply chains, as everyone knows with China, are quite sophisticated and quite complex in terms of both up and down the supply chain.

So I think this is not just a question of fixing a border or dealing with a drug problem.

Not that those are insignificant, but you have a network of factories and supply chains, ships, trucks, consumers, workers.

Everybody is affected when you have the two largest economies of the world beginning a trade war.

Now, whether this trade war actually turns out to be a trade war, and Xi and Trump speak on the phone, which is already planned, who knows?

Maybe in the next day or two, Xi will say something that will satisfy Trump.

I don't think so, but I think that's the theatrics that is going on in the background here.

And it really undercuts, I think,

Trump's strategy to try to be a strong man relative to other countries around the world using tariffs.

Dr. Harry Broadman there, who was a former US Assistant Trade

Representative and Chief of Staff in the US Presidents

Council of Economic Advisers.

So interesting to get his take on things.

Let's now get an expert view on the market reaction.

So it's proving to be another roller coaster ride for traders today.

As I mentioned earlier, in Asia, shares in Hong Kong were rallying.

They opened up over 3%.

That was also the case in Japan and other markets in Asia.

But now investors are wary again with the trade spat between the US and China gathering speed.

Russ Mould is Investment Director at AJ Bell and shared with me his view.

Interesting to see that those rallies we saw in Asia this morning didn't get back all of the ground they lost yesterday, because there's still the 30-day option for Trump to bring tariffs back on Canada and Mexico.

There were the new tariffs on China, which have now come in.

And there were the old ones, which is still there.

And there's still a source of conflict between the two.

And now we have the additional complication of China raising the stakes.

Now we'll see what comes out of those talks.

Reluctantly looking at President Trump's XFeed, he seems to be linking a trade deal with China to what happens with TikTok in particular.

Well, I was just going to say, actually, it's been really interesting in Hong Kong.

The big winners today are all the tech stocks.

There's conversations about the future of TikTok is likely to be revealed soon, that negotiations are ongoing.

It's, as I said to Harry Broadman, it's such a complicated relationship, isn't it, between the US-China on so many levels.

Yeah, I mean, the customs duties that America generates overall are now more than double where they were eight years ago when President Trump introduced his first tariffs on Chinese goods, such as washing machines, steel, and aluminium.

And the Biden administration didn't remove those, and it actually added to them.

So the tensions have been going on now for eight years, and they haven't come down.

Technology, national security, intellectual property are all very, very hot issues between the two nations.

And whether one phone call can resolve them or not is difficult to tell, but it seems unlikely.

It will be interesting to see what happens after the conversation between President

Trump and President Xi, which we're told will happen sometime this week.

But from China's perspective, its economy is in a tough spot, has been, really, since the pandemic.

The growth is not kicking in.

There's all sorts of issues impacting the Chinese economy.

This couldn't come at a worse time, could it?

No, you could argue from President Trump's perspective, his arguments, therefore, are the ideal time to have it, in that China's economy, as you say, is struggling.

It's coming out of a real estate bust.

Its infrastructure and domestic spending model is struggling to take up the load.

And its other economic engine has been exports to the world, which America is now trying to hem in.

So from a US perspective, it's a good time to apply pressure.

From a Chinese perspective, as you say, it's a very, very difficult one for them as they try and get domestic consumption going.

Russ Mulder from AJ Bell.

Well, let's stay with the China-US relationship.

China says it is to probe the US tech giant Google over violations of anti-monopoly laws.

Beijing's state administration for market regulation is saying the US tech giant was, and this is a quote, suspected of violating the anti-monopoly law of the People's Republic of China.

Let's go to our Asia business hub.

Mariko Oi is there with the details.

What can you tell us, Mariko?

Well, Sally, as you said, the announcement came just as Beijing announced those retaliatory tariffs.

Shortly after that deadline passed, four US tariffs on China passed.

Of course, Google's search services in China have been blocked since 2010.

So many started asking what is actually the target, what kind of business activities are still taking place in China by Google.

For example, its Android operating system reportedly has more than half the smartphone market use by companies like Xiaomi, Envivo, and OPPO.

So it's still quite a big business for Google.

Also, Google still provides apps and games to the Chinese market through partnership with local developers.

So those are the business activities that are targeted by this investigation.

But many analysts, as you've just been talking to your guests about it, have been saying that these announcements appear rather symbolic because even some of the products that China imports from the United States that have been hit by these retaliatory tariffs, for example, crude oil, China doesn't import much of it from the United States.

So all these announcements, while, of course, are very big and sending a clear signal to Washington about Beijing's expression of response to those tariffs, it does seem rather symbolic.

And it seems like quite a similar story when it comes to this Google's case as well.

OK, Mariko, for now, thank you.

Around the world and across the UK, this is BBC News.