China is ‘fully prepared’ if trade war kicks off

Associated Press

BEIJING

China said Tuesday it’s “fully prepared” for a trade war with the United States as hopes dwindle for a breakthrough in tensions this week between the world’s two biggest economies.

Washington is due to start charging tariffs on $34 billion in Chinese imports as of Friday while Beijing has pledged to retaliate with equal tariffs on $34 billion in U.S. goods.

Foreign Ministry spokesman Lu Kang told reporters that China is “fully prepared to take a package of necessary measures” to safeguard its national interests.

U.S. companies ranging from soybean farms to whiskey distilleries to automakers like Ford and Tesla could suffer if China ramps up retaliatory measures. China’s list is designed to inflict pain on U.S. farmers and other groups that are important to President Donald Trump’s political base.

Trade friction also threatens to ensnare major Chinese companies, with China Mobile the latest to encounter obstacles in the U.S. market. A U.S. agency under the Department of Commerce recommended Monday against giving operating licenses to China’s largest telecom carrier, citing national security risks posed by the state-run firm.

Lu on Tuesday called the warnings “unfounded speculation and an irrational clampdown” stemming from a Cold War mentality.

“We hope the US will provide a level-playing field for Chinese companies’ investment and operation in the US and do something conducive to the mutual trust,” he said.

China’s stock market has fallen nearly 10 percent in recent weeks on fears of a trade war while its currency has dropped sharply against the U.S. dollar.