China considers possible tariffs on $3bn worth of US goods
US tariffs set bad precedent for global trade, says China
(35 minutes later)
China has said it is considering imposing tariffs on $3bn worth of US products in retaliation to new tariffs announced by US President Donald Trump.
China has said it firmly opposes new tariffs the US plans to impose, saying it has "set a very bad precedent".
The list of products under consideration by China includes pork, wine, fruit and nuts and stainless steel pipes, among others.
The tariffs on up to $60bn of Chinese products were announced on Thursday and were a response to allegations of intellectual property theft by China.
At the same time, China has asked the US to avoid taking US-China trade relations to a "dangerous place".
China said such measures were "not conducive to global interests" and urged the US to avoid damaging trade relations.
Beijing said it hoped the US would pull back "from the brink" of a trade war.
The dispute has sparked fears of a global trade war.
On Thursday, the US announced plans to impose tariffs on up to $60bn (£42.5bn) on Chinese imports and limit the country's investment in the US.
China earlier on Thursday announced its own raft of proposed tariffs worth $3bn in response to earlier US tariffs on steel and aluminium imports.
The move was a response to years of alleged intellectual property theft by China.
The list of products under consideration by China includes pork, wine, fruit and nuts and stainless steel pipes..
On Friday, China's commerce ministry said economic co-operation was "the only right choice" and urged the US to deal with the issue through dialogue to avoid long-term damage.
US pork in the crosshairs
But the ministry said it had plans for two steps of retaliatory tariff action:
President Donald Trump announced on Thursday that the US intended to introduce tariffs on China over its alleged unfair trade practices.
The first step would be imposed if the US failed to reach a trade agreement. The second after further evaluation of the US tariffs.
The tariffs would cover up to $60bn (£42.5bn) of Chinese goods while limits would be placed on its investments in the US.
China said that while it did not want a trade war, it was not afraid to have one.
In a statement on Friday, China's commerce ministry accused the US of ignoring its efforts to strengthen intellectual property rights and of "disregarding the voices of the broad masses of the industry".
Beijing also has plans to pursue legal action through the World Trade Organisation on US tariffs announced earlier this month against imported steel and aluminium products.
"It is a typical unilateralism and trade protectionism. China firmly opposes it," said the statement.
"China will not sit idly by its own legitimate rights and interests. We are fully prepared to defend our legitimate interests."
The statement repeated assertions that China "does not want to fight a trade war, but it is absolutely not afraid of a trade war".
Also on Friday, steep new tariffs come into force in the US on steel and aluminium imports. Mr Trump has said these are needed to tackle "unfair" trade imbalances.
China, the 11th biggest exporter of steel to the US, said earlier on Friday it was considering measures "to balance out the losses caused to Chinese interests".
It said it was planning two steps of retaliatory action:
Markets in Asia fell on fears that the US and China were about to embark on a trade war.
Markets in Asia fell on fears that the US and China were about to embark on a trade war.
The benchmark Nikkei 225 was down 3.5% in late morning trade, Australia's S&P/ASX 200 was down close to 2%, and markets in China were all in negative territory.
The benchmark Nikkei 225 was down 4.6% in late afternoon trade, Australia's S&P/ASX 200 closed down 2%, and markets in China were all in negative territory.
US stock markets also closed lower on Thursday.
US stock markets also closed lower on Thursday.
Why is the US taking this action?
The US imports billions more goods from China each year than it exports, creating a deficit of about $375bn last year - which is what Mr Trump has railed against.
The president said on Thursday that he has asked China to cut that deficit by $100bn "immediately".
But the new US tariffs follow an investigation into Chinese policies ordered by Mr Trump in August.
The White House said this found a range of "unfair" practices in China, including restrictions on foreign ownership that pressured foreign companies into transferring technology.
The review also found evidence that China imposes unfair terms on US companies; steers investments in the US to strategic industries; and conducts and supports cyber attacks.
The White House said it had a list of more than 1,000 products that could be targeted by tariffs of 25%. Businesses will have the opportunity to comment before the final list goes into effect.
The US is also exploring ways to limit Chinese investment in the US and will seek to bring complaints about unfair licensing terms to the World Trade Organization, officials said.
America's top trade negotiator Robert Lighthizer said protecting US technology was critical to America's economic future.
Who are the potential losers in a trade war?
US officials had acknowledged the possibility of retaliation from China, but said the Asian giant ultimately had more to lose.
If imposed as described, the US tariffs could lead to higher costs for consumers, while China's retaliation would hit key sectors of the US economy including agriculture and aerospace, analysts say.
China was the third largest market for US exports in 2016 and among the biggest buyers of American corn, pork and aircraft.
China is also the world's biggest consumer of soybeans and consumes about one third of the US crop.
But in news which will come as a relief to US farmers, Friday's announcement did not include the soybeans.
Is there wider support in America for the plan?
Critics of Mr Trump's policies dismiss worries about the trade deficit, saying the exchange benefits both sides.
However, there is growing bipartisan concern in America about China's state-led economy and worry that China is seeking technology that could be deployed for military purposes.
Mr Trump's America First policy remains popular with large sections of the US public.
However, trade watchers in Asia says China's retaliation will not doubt be carefully targeted to hit key Trump-supporting areas of the US.
"The Chinese have been developing their list for more than a year and they are very good," said Deborah Elms, executive director of the Asian Trade Centre in Singapore.
"They may also add services companies that want to sell into China. If things get very nasty, they can also make life very difficult for US companies doing business in China. It's going to be very interesting."
