The US has suggested that it may ultimately impose tariffs on $500 billion worth of Chinese goods, or roughly the entire amount of US imports from China. "We believe the United States measures interfere with economic globalization and damage the world economic order".
China's government vowed Wednesday to take "firm and forceful measures" as the USA threatened to expand tariffs to thousands of Chinese imports like fish sticks, apples and French doors, the latest salvo in an escalating trade dispute that threatens to chill global economic growth.
"For over a year, the Trump Administration has patiently urged China to stop its unfair practices, open its market, and engage in true market competition", Lighthizer says.
"China has no option but to fight fire with fire".
China gave no details, but it has plenty of options to retaliate that could extend beyond additional tariffs on United States imports.
"China's closest neighbors, namely Japan, Korea and Hong Kong, are most vulnerable to a U.S. -Sino trade war because they export mostly intermediate goods to China", OCBC said in a note. "There is no justification for such action".
With no end in sight for the Trump administration's trade war with China, which escalated on Tuesday with an announcement that an additional US$200 billion in Chinese goods will face tariffs, the discussion about how China will respond is heating up.
Head of U.S. equity strategy at JP Morgan, Dubravko Lakos-Bujas, said: "Despite trade headlines, S&P 500 companies should deliver robust earnings on above-trend revenue growth and sharply higher margins".
The US Chamber of Commerce, which has supported Trump's tax cuts and efforts to reduce regulation of businesses, also criticised the administration's move.
'Tariffs on $200 billion in Chinese products amounts to another multibillion-dollar tax on American businesses and families, ' trade lawyer Scott Lincicome said.
President Donald Trump has threatened to tax as much as $US550 billion in Chinese products - an amount that exceeds America's total imports from China past year.
They also said they remain open to working with China to try to resolve the dispute, but the response from Beijing so far has been unsatisfactory.
It stems from Washington's belief that Beijing steals or pressures companies to hand over technology and worries that plans for state-led development of Chinese champions in robots and other fields might erode American industrial leadership.
"American families are the ones being punished". The prospect of an global trade war has sent jitters through world markets. Until January 2017, Ivanka's products were made in factories based in China and Hong Kong; around the time of Trump's inauguration, they appeared to make a well-timed exit and moved to other foreign factories, such as those in Indonesia, Vietnam, and South Korea.
The Office of the US Trade Representative is seeking submissions on the latest proposed tariffs and will conduct hearings in late August, making September the earliest possible implementation date for the new import taxes.
The International Monetary Fund has warned that a full-blown trade war could undermine the broadest global upswing in years. But Trump hasn't backed down, arguing that China's unfair trading practices are hurting American workers.
The office of US Trade Representative Robert Lighthizer has released a list of Chinese products, running to nearly 200 pages, that will potentially be hit with a 10 per cent import tax as early as September.
Trump had threatened earlier that he would impose additional tariffs if Beijing retaliated with countermeasures.