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China 'shocked' by new $200 billion tariff threat from US, says Chinese commerce ministry

 Photo: Politico

China has said it is "shocked" and has to take "necessary countermeasures" after the US threatened to impose another round of tariffs on Chinese goods, ramping up the ongoing trade war between the two economic giants.

On Tuesday night, the Trump administration released a list of $200 billion worth of Chinese goods that could face 10 percent tariffs after a public consultation period by August 30. It includes fruits and vegetables, handbags, refrigerators, rain jackets and baseball gloves.

The move came just days after the pair imposed tit-for-tat tariffs on $34 billion of goods.

"It is unacceptable that the US side insists on imposing tariffs on Chinese goods and the Chinese side strongly opposes the US decision," a spokesperson for China' commerce ministry said in a statement on Wednesday.

"The irrational behaviour of the US side is hurting China, hurting the world and hurting itself."

"The Chinese side is shocked by the actions of the US side, and in order to safeguard the core interests of the country and the fundamental interests of the people, the Chinese government will, as always, have to take necessary countermeasures," it added.

"At the same time, we call on the international community to work together to safeguard the rules of the WTO, uphold the values of the multilateral trading system and jointly oppose unilateral trade practices.

"Meanwhile, we will immediately file an additional lawsuit against the unilateralist behavior of the US to the WTO," the statement concluded.

Heightened tensions

Tuesday's action makes good on a threat US President Donald Trump made last month.

He directed Trade Representative Robert Lighthizerr to identify $200 billion in Chinese goods for tariffs if China retaliated against US penalties.

It wasn't immediately clear how China would respond to the new tariffs.

When Trump first threatened last month to target another $200 billion of Chinese goods, Beijing said it would be "forced to strike back hard, and launch comprehensive measures that match the US move in quantity and quality."

Analysts say the Chinese government could target trade in services between the two countries, such as tourism and education, or seek to make life difficult for big American companies operating in China, according to CNN.

Turbulent stock market

Asian stock markets fell sharply on Wednesday as investors shunned risk amid escalating trade tensions between China and the US.

In China, Hong Kong's Hang Seng index dropped 1.6%, while the Shanghai Composite fell 2%.

Japan's benchmark Nikkei 225 index shed 1.2%.

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