Raising prospects of a trade war, China pledged to strike back immediately if United States imposes 25% tariffs on its goods. The response has come hours after Trump administration unveiled revisions to a tariff list targeting $50 billion worth of industrially significant Chinese goods.
The 2 countries appeared increasingly to be headed towards a trade war after several rounds of talks failed to resolve US complaints over Chinese industrial policy, market access, and $375 billion trade gap.
“If the United States takes unilateral, protectionist measures, harming China’s interests, we will quickly react and take necessary steps to resolutely protect our fair, legitimate rights,” Chinese Foreign Ministry spokesman Geng Shuang was quoted by CNBC as saying.
The news of a possible trade war has sent Shanghai stocks spiralling downwards to end at the lowest level since September 2016.
China has vowed that any tariffs will void progress made in recent negotiations between Beijing and Washington and has drawn up its own list of $50 billion in US goods to target. The Chinese response include tariffs on US goods roughly equal in value to those to be sanctioned by the US.
According to reports, US President has made his mind to impose significant tariffs on Chinese goods. Although it’s not clear when would Trump impose the tariffs, according to a report in Reuters the decision is expected on Friday.
If implemented, analysts claim, the tariffs will dent economic growth on both sides of the Pacific.