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As Asian stock markets plunged at the prospect of a trade war between the world’s two biggest economies, China’s commerce ministry urged
A ministry statement on Friday said the higher US tariffs “seriously undermine” the global trading system.
“The Chinese side urges the US side to resolve the concerns of the Chinese side as soon as possible,” the ministry said. It appealed for dialogue “to avoid damage to overall Chinese-US cooperation.”
The Dow Jones industrial average dropped 724 points, or nearly 3%, after Trump’s announcement on Thursday, and Asian markets followed suit in Friday’s session.
The Nikkei in
Hannah Anderson, global market strategist at JP Morgan Asset Management, said: “The equity market will bear the brunt of the market reaction. Most impacted will be the US,
China’s foreign ministry suggested soybeans, airplanes, cars and cotton could be targeted in response, while an editorial in the Global Times, a nationalistic Chinese tabloid, also pointed to US soybeans and cars as potential targets.
“When the time comes it is not only the Chinese government that will counterattack the US trade war, there will be many Chinese people willing to turn it into a people’s war,” the editorial said. “Don’t believe it? Come try us”.
Goods targeted for possible higher Chinese tariffs include wine, apples and ethanol, which would hit agricultural areas where voters supported Trump in the 2016 presidential election.
“Chinese officials have bounced around the idea of a soybean or pork tariffs in response, which they know will hurt farm states that voted for Trump,” said Victor Shih, a professor of political economy at
The Chinese government could also target US technology companies that manufacture products in
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The ministry said
A second group of products targeted for a possible 25% tariff, mirroring the higher American charge on steel, includes pork and aluminum scrap, according to the ministry.
“It’s already a trade war. And this war is started by the US,” Cheng Dawei, a professor of international trade at Renmin University in
The Chinese government is still consulting with industry leaders on other possible retaliatory measures, she added, while
Further tariffs are likely, with Chinese president Xi Jinping recently delivering a nationalistic speech at the close of a parliamentary session where he secured a removal of term limits on his office.
“The US action demonstrates how much damage Xi Jinping has done to the US-China relationship, he completely rejected Obama’s outstretched hand and now there’s broad support in
Additional reporting by Xueying Wang