on trade. not going to happen anymore. not going to happen. >> cnn's paula newton is joining me now from the new york stock exchange. now the question is, what is china going to do about this. >> if you're a farmer in iowa, you pretty much know what is going to happen because the rumors are that, it will hit the agriculture sector, most specifically there are other things on the list, though, things like manufacturing goods. the problem is the farmers are starting to see the relationship with their largest export market change and that's a problem. it is going to be interesting to see how this shakes out economically and politically. the president's statement this morning, kate, he said, look, if china retaliates, it said it will, we'll come back at this. that means game on, it is a trade war. now it is true that the president does see this as a negotiating tactic and believes that this will give the united states the upper hand. and really rectify what he sees as decades of missteps on trading relationships. that does not help if you're a