The United States is opening fire on the world and itself in going through with imposing punitive tariffs on US$34 billion (S$46.4 billion) worth of Chinese goods, Beijing has said, warning that it would take immediate retaliatory measures.
"If the US implements tariffs, it is actually imposing tariffs on Chinese and foreign companies, including US companies," Mr Gao Feng, spokesman for the Ministry of Commerce, said yesterday.
He noted that of the US$34 billion worth of goods targeted, US$20 billion, or about 59 per cent, were produced by foreign companies, a significant proportion being US firms.
"The US measures are essentially attacking the global supply and value chains. To put it simply, the US is opening fire on the entire world, including itself," he added.
The US tariffs of 25 per cent, on products linked to China's high-tech industries, are set to take effect today at 12.01am Eastern Time, or 12.01pm in Singapore.
China has said that it will impose equivalent tariffs on an equivalent amount of US goods, including pork, seafood, cotton and soya beans.
Mr Gao said: "The US has provoked this trade war. We are un-willing to fight, but in order to safeguard the interests of the country and the people, we have to fight if necessary."
He said China "will never fire the first shot" but will counter if the US implements the tariffs.
Asian markets largely fell yesterday in anticipation of the trade tariffs, with the Shanghai Composite Index shedding 0.9 per cent and closing at a two-year low, and Hang Seng falling 0.2 per cent.
The Nikkei 225 fell 0.8 per cent, and stocks in Thailand and the Philippines slumped 1.5 per cent. Stocks in Singapore, Indonesia and Malaysia finished slightly stronger.
Trade friction between the two largest economies of the world has been worsening since US President Donald Trump took office early last year. He threatened to take action against the huge trade deficit the US has with China and against what the US describes as China's unfair trade practices, including theft of US intellectual property.
In May, the two sides appeared to have reached agreement to set aside tariffs while talks continued. But later that same month, the US said it would move ahead with imposing tariffs on US$50 billion of Chinese goods. Last month, it set the date of July 6 for tariffs on US$34 billion of goods, with those on another US$16 billion to be imposed later.
The Chinese announced its retaliatory measures in response.
The first round of tariffs today could shave 0.15 percentage point and 0.1 percentage point off the Chinese and US gross domestic product, respectively, Rabobank said in a recent report.
But neither side has shown signs of backing down.
The Chinese government on Monday convened a meeting of a newly formed financial stability and development committee, headed by Vice-Premier Liu He, who led the trade talks with the US.
It discussed economic threats and external risks, according to a government statement which added the country has "favourable conditions to win big risk control battles and cope with external risks".
Yesterday, the central bank cut the country's reserve requirement ratio for commercial banks by 0.5 per cent, opening up an extra 700 billion yuan (S$143.9 billion) for lending.
The Chinese government appeared to be looking towards the longer term as well, unveiling a new tax plan earlier this month that will boost household consumption and ease savings levels, which will help with its economic restructuring but also mitigate effects of a trade war.
The Chinese have appealed to the rest of the world as well to join in its fight against the US' unilateralism.
Mr Gao said: "We call on all countries to act together and resolutely oppose trade protectionism and unilateralism, and safeguard the common interests of the people of the world."
Reuters reported that European officials have said China has put pressure on the European Union to issue a strong statement against Mr Trump's trade policies.
A deputy editor of a magazine published by Xinhua news agency, blogging under the handle "bullpiano", wrote: "The showdown will begin soon, the guns are loaded, and China is waiting quietly."