China rejects 'blackmail' on eve of United States tariff hike

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China rejects 'blackmail' on eve of United States tariff hike

Friday's tariff hikes are the first stage in threatened USA increases on up to $450 billion of imports from China over complaints Beijing steals or pressures foreign companies to hand over technology.

"Put simply, the USA is opening fire on the world - and itself", Chinese Ministry of Commerce spokesperson Gao Feng said on Thursday.

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

Countries are ranked by how integrated they are into the global value chain.

Chinese President Xi Jinping's government has issued a list of USA goods for possible retaliation, but the Commerce Ministry said it will wait to see what Washington does. The Chinese Ministry of Commerce called Trump's tariffs threats "blackmail" and promised that China would not back down from a trade fight.

The conflict will escalate further Thursday night when USA tariffs on $34 billion of Chinese imports take effect, with Beijing planning to swiftly respond on an equal amount of goods. China has said it will not back down, although it has fewer US imports to target.

Gao said China's foreign trade was expected to continue on a stable path in the second half of the year, though investors fear a full-blown Sino-U.S. trade war would deal a body blow to Chinese exports and its economy.

Despite the escalating rhetoric and explosive tweets, Senate Minority Leader Chuck Schumer, a Democrat, attacked Presdient Trump last week for not being tougher on China.

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.

China is expected to retaliate as soon as the U.S. tariffs go into effect, imposing duties on goods worth roughly the same amount but with a greater emphasis on politically sensitive agricultural products. "At that point, the United States will be more interested in negotiations, and the Chinese side will also want to come to the table".

In its official discourse, China says it's girded for a trade war with the USA and can give as good as it gets.

Chinese stocks slipped on Thursday and the yuan gave back some of its recent gains against the dollar as a targeted cut of reserve requirements for banks took effect amid heightened the trade tensions. The initial set of US tariffs could rock companies in the technology sector and hike the price of "Walmart-type" products.

Some U.S. companies are pulling back investments in equipment and jobs "as a result of uncertainty over trade policy", the Federal Reserve warned Thursday, adding that the U.S. clashes with trading partners were already huring the stock market and could also harm overall economic growth. The overall value mirrors USA tariffs, which also are set to kick in on Friday.

Trump has threatened other measures created to limit China's ability to access the US.

How much consumers are willing change their behaviour because of the tariffs will shape which businesses suffer most.

But the European Union, the world's largest trading bloc, has rejected the idea of allying with Beijing against Washington, five European Union officials and diplomats told Reuters, ahead of the summit.

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