US President Donald Trump fired the biggest shot yet in the global trade war by imposing tariffs on US$ 34 billion of Chinese imports.
In the Bulgarian capital, Li will attend a meeting between China and 16 central and eastern European countries that will focus on trade.
U.S. President Donald Trump speaks during a Make America Great Again rally in Great Falls, Montana, U.S., July 5, 2018.
"For companies with supply exposure to tariffs, they will move sourcing country of origin if they can; if they can't, they'll pass on as much of the tariff cost as they can, or see a cut in margins", said Jacob Parker, vice president of China operations at the US-China Business Council in Beijing.
A second tranche of 284 goods worth $16 billion is now under review and could be added to the USA list.
In addition to the tariffs, Trump is also planning on limiting Chinese investment in USA tech firms and also restricting exports of tech devices to China, fearful that Chinese tech is catching up to American tech, perhaps even surpassing it in some areas.
Initially Chinese President Xi Jinping appeared to relent with the suggestion that they may lower tariffs on imports of USA auto imports to the country.
"If what the U.S. wants is to escalate a trade war with China, then so be it".
American soybean farmers are warning that President TrumpDonald John TrumpWhat to know about Trump's Supreme Court pick so far Bookstore owner calls police after customer confronted Steve Bannon McConnell pushing Trump toward 2 potential Supreme Court picks: report MORE's trade dispute with China will result in "serious damage" to their industry.
Traders, economists and politicians are now concerned with what will happen next.
US carmaker Ford Motor Co.
President Donald Trump on Monday warned the WTO that if the USA isn't treated "properly, we will be doing something".
US and European shares were boosted by reassuring economic data from Germany, and as automakers' shares .sxap jumped, with German Chancellor Angela Merkel saying she would back lowering European Union tariffs on USA auto imports after Washington offered to scrap threatened tariffs on European cars.
The back-and-forth trade battle between the world's two largest economies will likely be damaging to the U.S. economy according to trade experts, ths fact was not lost on the Chinese.
Le Drian said such policies have victims, "but the victims tomorrow will be the Americans themselves".
USA tariffs on $34bn in Chinese imports took effect as a deadline passed on Friday, and with Beijing having vowed to respond immediately in kind, the world's two biggest economies took a high-stakes turn towards all-out trade conflict.
China says its tariffs on U.S. goods will take effect immediately after Washington's tariffs on Chinese goods kick in.
In the weeks since the US leveled tariffs on steel and aluminum - which the European Union called illegal - Mexico retaliated with levies of 15 percent to 25 percent on USA agricultural products; Canada imposed tariffs on almost $13 billion of US goods; and the European Union hit back with its own 25 percent tariff on distinctively American products ranging from bourbon to Harley-Davidson motorcycles.
If you like Chick-fil-A sandwiches, for instance, you may feel the impact of the tariffs.
The price of USA soybeans has plunged 17 percent over the past month on fears that Chinese tariffs will cut off American farmers from a market that buys about 60 percent of their soybean exports.
Japan's Nikkei 225 index was up 1.2 percent by mid-afternoon Friday while South Korea's Kospi added 0.1 percent.
The first round targets Chinese industrial goods, not consumer products, in an attempt to limit the impact on US households, but companies that rely on Chinese-made machinery or components may eventually have to pass along increased costs to customers. The Shanghai Composite index slipped 0.3 percent and Hong Kong's Hang Seng lost 0.5 percent.
Beijing earlier released a list of American goods targeted for possible tariff hikes including soybeans, electric cars and whiskey.