China urged the United States on Friday (Mar 23) to "pull back from the brink" as President Donald Trump's plans for tariffs on up to US$60 billion in Chinese goods brought the world's two largest economies closer to a trade war.
Trump is planning to impose the tariffs over what his administration says is misappropriation of US intellectual property. A probe was launched last year under Section 301 of the 1974 U.S. Trade Act.
"China doesn't hope to be in a trade war, but is not afraid of engaging in one," the Chinese commerce ministry said in a statement on Friday.
"China hopes the United States will pull back from the brink, make prudent decisions, and avoid dragging bilateral trade relations to a dangerous place."
In a presidential memorandum signed by Trump on Thursday, there will be a 30-day consultation period that only starts once a list of Chinese goods is published.
That effectively creates room for potential talks to address Trump's allegations on intellectual property theft and forced technology transfers.
Trump said he views the Chinese as "a friend", and both sides are in the midst of negotiations.
The prospect of a full-blown trade war between the United States and China has sent shivers through economies supplying them, as a fall in demand would be inescapable.
Feeling the chill, stock markets fell, but perceived safe havens such as government bonds gained.
Alarm mounted earlier this month after Trump imposed hefty import tariffs on steel and aluminium this month under Section 232 of the 1962 US Trade Expansion Act, which allows safeguards based on "national security", though that measure had not just targeted Chinese imports.
In a separate statement, the Chinese commerce ministry unveiled plans to levy duties on up to US$3 billion of US imports in response to the steel and aluminium tariffs, which will go into effect on Friday.
China was considering levying an additional 15 per cent tariff on US products including dried fruit, wine and steel pipes and an extra 25 per cent duty on pork products and recycled aluminium.
China has assembled a list of 128 US products in total that could be targeted if the two countries are unable to reach an agreement on trade issues, the ministry said.
The commerce ministry said China would implement the measures in two stages: first the 15 per cent tariff on 120 products including steel pipes and wine worth US$977 million, and later, the higher 25 per cent tariff on US$1.99 billion of pork and aluminium.
"We intend to impose tariffs on certain US imports to balance out the losses caused to Chinese interests by the US tariffs on imported steel and aluminium," the ministry said.
The ministry added it would take legal action under the framework of the World Trade Organization to maintain the stability of global trading rules. It added, however, it hoped it could resolve issues with the US through dialogue.