The world is on tenterhooks as the two largest economies face off in an increasingly bitter trade war that is already causing damage.

The Retail Industry Leaders Association (RILA) was quick to condemn the proposal, saying it will punish American consumers.

Moscow has raised tariffs from 25 to 40 percent on some US imports in response to Washington’s move to impose tariffs on Russian steel and aluminum.

Asia is bracing for the opening salvo in a tit-for-tat trade battle, with the US due to impose 25% tariffs on $34bn of Chinese goods on Friday.

Harley-Davidson plans to shift some motorcycle production away from the US to avoid the "substantial" burden of European Union tariffs.

Responding to US President Donald Trump’s decision to impose tariffs on $50 billion worth of Chinese imports, Beijing has adopted a 25 percent tariff on 659 American products worth the same amount.

The US is to impose tariffs on steel and aluminium imports from the European Union, Mexico and Canada.

China and the US say they will halt imposing punitive import tariffs, putting a possible trade war "on hold".