China warns United States "opening fire" on world with tariff threats

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As hopes of stopping the two leading economic superpowers entering a long and damaging trade war dwindles, Beijing issued a stinging attack on the U.S. president.

Relations have soured between US President Donald Trump's administration and that of Chinese President Xi Jinping since they met in Beijing previous year, sparking fears of an all-out trade war.

Speaking at a weekly news conference, 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.

Washington's targets for higher border taxes focus on industrial components like PC parts, fuel pumps, construction equipment and autos, according to trade data firm Panjiva.

"If the USA implements tariffs, they will actually be adding tariffs on companies from all countries, including Chinese and US companies", Gao said.

China exported $34 billion worth of newly tariff-eligible goods to the USA previous year.

"The US's measures are essentially attacking the global supply and value chain". All told, U.S. President Donald Trump has said he is prepared to levy higher taxes on up to $450 billion in Chinese imports, or almost 90 per cent of the goods China shipped to the United States previous year.

Beijing has vowed to retaliate dollar-for-dollar, "immediately" imposing counter-tariffs on American exports in tit-for-tat measures, with experts warning the burgeoning conflict will send shockwaves around the global economy and strike at the heart of the world trading system.

"China will not bow in the face of threats and blackmail", he added. USA firms in China are already reporting spikes in random inspections at ports.

For instance, Trump announced that the U.S. would expand the use of the Committee on Foreign Investment in the United States, which could limit Chinese investment in USA companies.

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Fears over the impact of the trade clash have rattled markets around the world, with China's stocks and currency coming under particular pressure in recent weeks. But rules on auto manufacturing, pharmaceuticals and other industries require companies to operate through state-owned Chinese partners and share know-how with potential competitors or teach them how to develop their own.

On Friday, U.S. tariffs on $34 billion worth of Chinese imports will take effect. Americans worry that rising Chinese technological prowess might erode USA industrial leadership and prosperity.

"There is a chance the company will lose money and might go bankrupt", said Tong.

"There's enough of a trend to say this might be related", said Jake Parker, vice president of China operations at the U.S.

Xi's government has expressed confidence China can hold out against US pressure, but companies and investors are uneasy.

The worst-case scenario is that the trade war, in concert with monetary tightening, upends the global business cycle.

This set off furious negotiations, which eventually resulted in a tentative trade agreement between the Trump administration and Chinese officials.

Ford said it encouraged Washington and Beijing to resolve their issues over trade and that it would "continue to monitor the situation as it evolves".

A senior Western diplomat told Reuters that there was no sign of any talks at the moment between the two countries, even via back channels.

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