China Warns US "Opening Fire" On World With Tariff Threats

Stocks at Risk Caterpillar

Stocks at Risk Caterpillar

After months of threats and dwindling hopes the two sides would pull back from the brink of all-out trade war, steep United States tariffs on tens of billions in Chinese goods are due to take effect at midnight today.

If the USA starts taxing Chinese imports Friday, Beijing plans to impose 25 percent tariffs on 545 US products worth $34 billion a year - from soybeans and lobsters to sport-utility vehicles and whiskey.

China's foreign ministry said Tuesday that Beijing won't hesitate to retaliate against US tariffs and escalate a trade war with Washington if tensions over economic negotiations with the Trump administration continue to rise.

Speaking at a weekly news conference, Chinese Commerce Ministry spokesman Gao Feng warned the proposed USA tariffs would hit global supply chains, including foreign companies in the world's second-largest economy.

Economists have for months warned of the potential damage to the USA and global economies from aggressive trade policies that evolve into protectionism, which would raise prices and upend global supply chains.

Speaking at a daily news briefing, Chinese Foreign Ministry spokesman Lu Kang said his country is ready to retaliate, but didn't specify how and when.

"We will continue to assess the potential impact of the USA -initiated trade war on companies and will help companies mitigate possible shocks".

China is putting pressure on the European Union to issue a strong joint statement against President Donald Trump's trade policies at a summit later this month but is facing resistance, European officials said.

Trump has accused China of unfairly acquiring USA technology through coercion and theft and limiting market access for US finance and technology firms - claims that China denies.

China also has plans for a second round - but no start date - that would affect $16 billion of such United States goods as chemicals, coal, crude oil and medical devices.

The widely-read Global Times tabloid said in an editorial that China must prepare for containment by the United States.

The Trump administration has accused China of using predatory tactics in a lawless drive to overtake America's technological supremacy. Japan's government has warned in a report that a higher USA tariff on auto imports could backfire, jeopardizing hundreds of thousands of American jobs created by Japanese auto-related companies, raising prices for US consumers and devastating the US and global economy.

"I'm afraid not, for now", said Tu Xinquan, a trade expert at Beijing's University of International Business and Economics, who has advised the Chinese government.

The list of Chinese products targeted with USA tariffs include vaping devices, rare earth metals and LED light bulbs.

"U.S. citizens visiting or residing in China have been arbitrarily interrogated or detained for reasons related to 'state security, ' " the State Department advisory said.

Tensions are high between the two countries over the threat of tariffs.

The industry source said Beijing had been unable to address the Trump administration's concerns on Chinese trade policies in at least five key area, including forced technology transfers, Chinese industrial overcapacity, government subsidies, SOE reform, and Beijing's restrictions in the cloud computing industry.

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