(FOX 2) - Two world powers battling it out - China saying it's ready to slap tariffs or a tax on American-made goods after the president promised the same against the US.
In many ways ground zero is Detroit and the people who buy cars, trucks and SUVs.
FOX 2: "Does anyone win a trade war?"
"Not usually, " said Dr. Michael Mazzeo, dean of business school at Oakland University.
The president is using strong, unprecedented language saying he is ordering American companies to look for alternatives to China. In a Tweet, President Trump said:
"Our Country has lost, stupidly, trillions of dollars with China over many years. They have stolen our intellectual property at a rate of hundreds of billions of dollars a year and they want to continue. I won't let that happen! We don't need China"
The effects of the trade war will be felt in two phases. Both China and the us saying they will impose them on September 1st and then a second set in December. As soon as the ax falls, Mazzeo says, you'll know it.
"Limitation on product," he said. "How do you make a vehicle when you rely on product that now has an increased cost or may be limited in terms of supply."
The casualties will be felt in numbers that look like this for both countries. The president is levying $300 billion dollars of taxes on their imports. In response, China will raise tariffs on 75 billion worth of American goods
"This is basically a tax," Mazzeo said. "It makes products more expensive so if you're a business your product now becomes more expensive and people are less likely to buy it and so the market is saying oh wait a minute your profitability may not be there that we originally thought it would be."
The president is also asking delivery companies and the us postal service to search packages for fentanyl and refuse delivery. The news has already slowed down the robust stock market.
The Dow fell more than 400 points.
Car companies and Tier One suppliers watching carefully what the future may bring in light of the tough tariff talk. Ford Motor Company released a statement to Fox 2 late Friday: they say they are the leading exporter of vehicles assembled in the U.S. and are uniquely a net exporter to China.
A spokesperson goes on to say: "We encourage the U.S. and China to find a near-term resolution on remaining issues through continued negotiations..."
The things you're looking at is alternative suppliers but that's not easy to do," said Mazzeo. "If you have a limitation to products coming into this country and now you can't get those products at those competitive prices then you're going to look for other suppliers- but that's not easy to do."