UPDATE 1-INSTANT VIEW-China retaliates, slaps duties on U.S. soybeans, planes; markets skid

planes; markets skid@ (Adds comments)

NEW YORK, April 4 (Reuters) - China hit back quickly on Wednesday against the Trump administration's plans to impose tariffs on $50 billion in Chinese goods, retaliating with a list of similar duties on key U.S. imports including soybeans, planes, cars, beef and chemicals.

STORY:

COMMENTS:

BRUCE MCCAIN, CHIEF INVESTMENT STRATEGIST AT KEY PRIVATE BANK IN CLEVELAND, OHIO

The problem with this is its coming at a time when we are trying to put an end to a fairly normal correction (in stocks). So I think there is the potential that this drives it a little bit deeper as we do that, but our philosophy has been as long as there is not major economic deterioration, whatever you see in terms of a short-term emotional reaction in a market correction will tend to play itself out and then ultimately the longer-term trend will reassert itself...

The market hasnt wanted to finish the correction. It has avoided sell-offs except on some really bad news. If anything this may give it a push over the edge so we can get the corrective forces to play out and then stabilize things and be prepared to really assess what the longer-term prospects look like.

"(The midterms are) clearly an overhang that we are going to have to face, but I think most investors assume there is going to be some loss for the Republicans as we go through the midterms and then we will see what ultimately happens.

Going into this, Trump had a number of things that he wanted to achieve as part of his agenda, and one of them was trade issues. The interesting thing is virtually everybody agrees there are some things China has been doing that they shouldnt be doing. Whether or not he is taking the right approach to it or not we will see in the coming months, but if he actually can come out of this with some major concessions from China that deal with some of the intellectual property rights and some of the other things that have been problematic, it will ultimately I would think leave him in better shape for the midterms then it would be if he doesnt go through it now.

JIM VOGEL, INTEREST RATE STRATEGIST, FTN FINANCIAL, MEMPHIS, TENNESSEE

Fixed income has been ahead of equities on this story since it broke in March and equities did their best to ignore it. People arent used to even asking the questions much less putting pencil to paper to try to develop even a preliminary answer. Were trading some of this stuff in four to eight hour increments and changing our minds collectively as to what it really is going to mean. In theory trade breakdowns dont impact the economy quickly, instead they are a damper on forward activity, but the stock markets acting like things are going to come to a screeching halt.

Because tariffs are an underlying part of the new tension, the market will eventually shift far more attention to the potential for a floor under inflation even if the economy sputters because we are hurting certain select industries.

MARC CHANDLER, CHIEF GLOBAL CURRENCY STRATEGIST, BROWN BROTHERS HARRIMAN & CO, NEW YORK

All that has happened in the past 24 hours is that the details of sanctions - which goods - have been announced. The real escalation is if the U.S. retaliates again.

The selloff in the U.S. stock market that began in late January into early February began before the trade war talk started. Some investors might want to come get back involved the S&P 500 is below the 200-day moving average but I think these trade issues keep them off-balance.

"I dont think were in a trade war. I think of a trade war as an escalation ladder, and these moves are still low rungs on the ladder. Rungs we have already explored with other countries including allies like Canada. Theres almost always constant tension over lumber, dairy, pipelines, autos and we take each other to the WTO. And there are tariffs. And no one thinks the U.S. and Canada are in a trade war. The militaristic concepts were invoking currency war, trade war, a new Cold War are jumping rungs on the ladder.

JACK ABLIN, CHIEF INVESTMENT OFFICER AT CRESSET WEALTH IN CHICAGO

Now they are coming back targeting our largest exports. Futures seem to be eroding. Tariffs by themselves and an escalating trade war would certainly have deleterious effects on just about everything. Stripping it away, at least we are not in a frothy market situation, something where there is some vulnerability there. There are going to be a lot of companies not affected by tariffs, probably, and those earnings are going to be pretty good.

"One of the things is that analysts are actually raising their revenue and profit forecasts going into the (earnings) season, which is really kind of a reversal of what we have seen for years. If you take those numbers and project out for four quarters, I argue the market is about 7.5 percent undervalued relative to the next four quarter earnings if you just look at the cumulative growth.

"Obviously we need kind of a quiet period on these headlines and we need to focus on what is ultimately important and that is earnings. So I am hopeful over the next couple of weeks that earnings will be that shiny object that everyone can focus on.

ADAM SARHAN, CHIEF EXECUTIVE OF 50 PARK INVESTMENTS IN NEW YORK

"The market is erring on the side of caution. The level of uncertainty has definitely surged. When you see China retaliate stronger than the U.S. that's a very strong signal that they mean business."

"Everybody knew they were going to retaliate. The question was how strong of a retaliation. Today's move clearly shows that they mean business."

"Today we're close to testing important levels of support. If the market takes out February's low, if all three indexes break below and close below that low that's going to significantly change the landscape. It'll show the intermediate term trend will have shifted to a bearish trend from a sideways trend."

"Right now we're clearly in correction territory. For the correction to end we have to get some certainty on this trade situation. If it escalates we're going into a bear market. If it de-escalated the market's moving higher. The only thing that matters now is certainty."

"You don't have to be fully invested. If this gets ugly and we get another 2008 style bear market everything goes down. If that happens, the safest place to be would be to be out of the market."

"The market is very news dependent and a positive headline or a positive tweet could significantly change the dynamic. The market right now is desperate for clarity. Until we get that clarity we'll have sideways to down action."

If the U.S. responds to China or if more countries are dragged in he said: "This could very quickly get out of hand and cause a global recession. For now a defensive stance is warranted."

RICHARD BENSON, CO-HEAD OF PORTFOLIO INVESTMENTS, MILLENNIUM GLOBAL INVESTMENT, LONDON:

"The impact on (the) financial market has not been that significant. So this has not really affected our portfolio allocation. We've done bits and pieces but there has been no massive shift. The net effect on U.S. GDP is just 0.3 percent of GDP, which is minimal. It could worsen, sure. If that materializes, then we could see a more pronounced sell-off in stocks. So we're waiting for the next moves from both the U.S. and China." MARKET REACTION:

STOCKS: Stocks were sharply lower, with the S&P opening down 1.3 percent. BONDS: Benchmark 10-year note prices gained 5/32 in price to yield 2.726 percent, down from 2.783 percent on Tuesday.

FOREX: The dollar nudged lower, down 0.2 percent.

(Americas Economics and Markets Desk; +1-646 223-6300)