China has said it will respond quickly to protect itself if the US harms the country’s interests.
The announcement was made as the US prepares imposing tariffs on $50 billion worth of Chinese goods.
US tariffs on Chinese steel and aluminium, which was announced in March, have already gone into effect.
“If the United States takes unilateral, protectionist measures, harming China’s interests, we will quickly react and take necessary steps to resolutely protect our fair, legitimate rights,” said Chinese Foreign Ministry spokesman Geng Shuang.
The US says that the new duties are in response to Chinese theft of intellectual property.
According to Reuters, a list of a further $100 billion in Chinese goods has already been completed by the US in the expectation that China will respond to the first wave of tariffs.
Laura Baughman, president of The Trade Partnership and Trade Partnership Worldwide, told CNBC that China could retaliate by targeting US products that would have an impact on Trump’s key base of political support.
“I think we’re going to be seeing some escalation of the trade conflict. China has already imposed retaliatory duties on U.S. exports with the steel and aluminum tariffs that we imposed on their imports, so these are all eventually going to hit U.S. jobs so it’s not going to be pretty,” Baughman said in an interview on CNBC’s “The Rundown”.
“Let us not understate the macroeconomic impact,” Ms Lagarde said. “It would be serious, not only if the United States took action, but especially if other countries were to retaliate, notably those who would be most affected, such as Canada, Europe, and Germany.”
“These measures … are likely to move the globe further away from an open, fair and rules-based trade system, with adverse effects for both the U.S. economy and for trading partners,” the IMF said.