The long-anticipated trade war between the US and China looks to be underway, with the Trump administration readying global tariffs on metals imports that would disproportionately target Chinese output.

Tariffs of 24% on steel imports and 7.7% on aluminium have been mooted and are under consideration after US investigations found that the imports of those metals are a threat to US national security.

In response, China said it had found evidence of dumping of styrene imports from the US, a chemical which is essential in the manufacturing of many plastics. The Chinese government has called for tariffs of between 5 and 10.7% on styrene imports.

Experts are warning that this could escalate very quickly and that there are infinite potential routes a trade war could take, including tit for tat tariffs, and countervailing duties relating to perceived government subsidies.

The US is also coming towards the end of an investigation into Chinese violations of the intellectual property of US corporations. The probe was launched last year after the invoking of section 301 of the Trade Act of 1974.

“The area I think is most worrying to most people is section 301,” Alexander Capri, senior fellow on trade and supply chains at the National University of Singapore, tells GTR.

The probe could uncover IP theft or infringement through the mandatory joint ventures that were a big part of foreign direct investment in China over recent decades, or through outright corporate espionage. Either way, to recover the perceived damages, the US reserves the right to slap tariffs on Chinese goods.

“It’s anybody’s guess, whether that becomes a flat tariff against all Chinese imports, or if they single out product groups. Will it happen? Nobody can predict anything that will happen with this administration, it’s totally mercurial. If it does happen, nobody would expect the Chinese to sit on their hands. They’d retaliate against probably US companies based in China. Either imposing taxes or whatever,” Capri says.

All of this could be bad news for US companies already in China, or those looking to enter the market. The escalation comes at a time when many fintech companies are looking to “crack China”, and the evidence suggests that these sorts of companies could get caught in the crosshairs.

Last month, for example, the US government blocked the US$1.2bn sale of MoneyGram to Alibaba’s Ant Financial platform.

“The geopolitical environment has changed considerably since we first announced the proposed transaction with Ant Financial nearly a year ago. Despite our best efforts to work co-operatively with the US government, it has now become clear that the Committee on Foreign Investment in the United States (CFIUS) will not approve this merger,” said Alex Holmes, CEO of MoneyGram, a money transfer and payments company.

Chinese telecoms giant Huawei also fell afoul of US regulators in January, when it was forced to scrap plans to offer customers Huawei handsets after members of Congress lobbied against the plan.

Eyeing developments carefully, no doubt, will be business leaders at Ripple, the blockchain-powered payments company, which this month partnered with LianLian, a Hong Kong firm, to offer cross-border payments into China.

The Mainland market is high on the Ripple agenda, with CEO Brad Garlinghouse telling GTR last year: “When I think about Ripple in China, we will almost certainly identify a partner and enter in conjunction.”

Hyperledger is another high profile fintech organisation attempting to make headway in China. In a recent interview with GTR, executive director Brian Behlendorf talked about the challenges of entering the market and appearing as an international firm.

“[We wish to be viewed] as a global organisation. If you look at our member organisations, we’ve got two of the 20 premier members based in Mainland China, Baidu and Wanda. I like to celebrate that,” Behlendorf said.

Should the US continue to block the expansion of China-based tech companies into its market, then it could realistically expect the same rules to be applied to US businesses in China.

“The Chinese have a certain advantage when it comes to their retaliatory measures in that they can weaponise democracy. They can specifically target firms from specific states and, depending on how much sway those companies have with their political representatives, that can influence politics in the US. Mexicans do that around Nafta by blocking some agricultural imports from certain states in the US,” Capri says.

He adds: “Here’s the bottom line, I think an escalation into a tit for tat is going to leave a lot of bloody noses anywhere. It’s not something anyone wants to see, and nobody can predict how far it will go.”