BEIJING/WASHINGTON – The trade war between the United States and Chinaescalated on Friday as Beijing threatened to unleash “countermeasures”against US plans to impose tariffs on $300 billion in Chinese goods.

President Donald Trump jolted global stock markets as he issued the threatjust a day after US and Chinese trade negotiators revived talks aimed atending the year-long dispute.

“China expresses its strong dissatisfaction and resolute opposition tothis,” foreign ministry spokeswoman Hua Chunying said at a regular pressbriefing.

“If the US implements the tariff measures, China will have to takenecessary counter-measures to resolutely defend the core interests of thecountry and its people,” Hua said, adding that Beijing did not want a tradewar “but is not afraid to fight one if necessary”.

She did not specify what kind of measures China would take, but in the pastBeijing has hinted that it could restrict exports of rare earths that arevital to the US technology industry, and it is also drawing up a blacklistof “unreliable” foreign companies.

Trump’s announcement means virtually all of the $660 billion in annualtwo-way trade between the world’s two biggest economies will have tariffson it.

China has imposed tariffs on $110 billion in American goods, almost all ofthe products it imports from the US.

Trump said 10 percent duties on $300 billion will take effect September 1,and come on top of the 25 percent tariffs on $250 billion in Chineseimports already in place.

Trump later raised the possibility he could increase the duties to “wellbeyond” 25 percent. “The 10 percent is… for a short-term period and then Ican always do much more or I can do less, depending on what happens withrespect to a deal,” he said at the White House.

After resuming face-to-face talks in Shanghai this week, trade negotiatorswere set to reconvene in Washington in early September for another round ofdiscussions, which means they will take place just after the new tariffstake effect.

“Slapping on tariffs is definitely not a constructive way to resolveeconomic and trade frictions, it’s not the correct way,” Chinese ForeignMinister Wang Yi said on the sidelines of a regional meeting of topdiplomats in Bangkok on Friday.

Craig Allen, president of the US-China Business Council, said his group wasconcerned that the new tariffs “will drive the Chinese from the negotiatingtable”.

The council is also worried about the potential Chinese retaliation.

“We are particularly concerned about increased regulatory scrutiny, delaysin licenses and approvals, and discrimination against US companies ingovernment procurement tenders,” Allen said.

– ‘Predatory tactics’ –

When he announced the tariffs on Twitter, Trump said Beijing had agreed “tobuy agricultural product from the US in large quantities but did not do so”.

Just hours earlier, China had said it had started to make more purchases ofUS farm goods.

“Additionally, my friend President Xi said that he would stop the sale offentanyl to the United States — this never happened, and many Americanscontinue to die!” Trump said, referring to the highly potent and addictiveopioid.

US Secretary of State Mike Pompeo directed more criticism at China at themeeting of Southeast Asian nations that Wang also attended in Bangkok.

“China has taken advantage of trade… It’s time for that to stop,” Pompeosaid, accusing Beijing of “protectionism” and “predatory tactics” to giveits companies an advantage in global markets.

Washington has accused China of using a state-directed economic model,unfairly subsidising production and stealing US technology.

– ‘Measured risk’ –

Trade relations with China have swung between progress and disaster,appearing to collapse in May only to be revived two months later afterTrump and Chinese President Xi Jinping agreed to a truce at a meeting inJune.

“We expect this (tariffs) step to make China less keen to achieve a dealand more determined to prepare itself for long-term economic tension withthe US,” Oxford Economics said in a note.

The Chinese commerce ministry said in a statement that the new tariffs area “serious violation” of the ceasefire.

“The core motivation is the talks clearly weren’t going to go anywherewithout more pressure on the Chinese,” said Derek Scissors, an expert onUS-China economic ties at the American Enterprise Institute, a conservativethink tank.

“Of course, they could react badly now and the talks could end entirely.It’s a measured risk,” he told AFP. – APP/AFP