Friday's tariff hikes are the first stage in threatened USA increases on up to $450 billion of imports from China over complaints Beijing steals or pressures foreign companies to hand over technology.
Asked on Thursday whether China would target US-funded businesses in China to counter U.S. restrictions on Chinese products, Chinese Ministry of Commerce spokesman Gao Feng said it was not part of Beijing's plan and, instead, China might compensate foreign businesses for losses from a trade war.
Economists have for months warned of the potential damage to the USA and global economies from aggressive trade policies that evolve into protectionism, which would raise prices and upend global supply chains.
"We are going to see in nearly all likelihood tariffs on some $34 billion of goods come down from the United States on China on Friday".
"While each measure on its own has small macroeconomic effects, the combination of the measures, the supply chain disruptions and the increased business uncertainty could spell trouble for the United States economy", Daco said. "To put it simply, the USA is opening fire on the entire world, including itself". "However, if the United States adopts taxation measures, China will be forced to fight back to defend the core interests of the nation and the interests of the people".
Gao said China would not bow to threats or blackmail and would have to fight back if the U.S. went ahead and imposed the tariffs. Ambassador Richard Grenell reportedly told representatives from Volkswagen, Daimler and BMW about a US proposal to reduce all auto tariffs.
Hungary, whose biggest trading partner outside the European Union is the United States, enjoys large investment inflows thanks to a large manufacturing base, particularly in the auto sector.
The trade dispute has roiled the stock market, where the benchmark Shanghai Composite index has tumbled 12 per cent in the past two weeks.
AUTO STOCKS RALLY: German newspaper Handelsblatt reported that a US official has met with German carmakers to discuss impending American tariffs on auto imports from the European Union.
"There's nothing we can do if there's a trade war", Gao said as he showed off the firm's imported lobsters amid tanks of seafood at its Beijing store.
Apart from a 25 per cent tariff on US$34 billion worth of US products as a tit-for-tat response to the US move, Gao did not specify what "qualitative measures" China would take if US President Donald Trump followed through on threats to impose tariffs on another US$200 billion worth of Chinese products.
Chinese exporters of tools, lighting and appliances say US orders have shrunk as customers wait to see what will happen to prices.
A USA industry source said: "There is a 99 percent chance that tariffs go into force on Friday". China vowed to match US moves, using both quantitative and qualitative measures.
They also worry the sparring between Washington and Beijing could fuel anti-American sentiment among Chinese consumers. But rules on auto manufacturing, pharmaceuticals and other industries require companies to operate through state-owned Chinese partners and share know-how with potential competitors or teach them how to develop their own.
Here are the top 10 countries most at risk in the event of an all-out global trade war.
And Gao noted that of the $34 billion in taxable products on the United States list, about $20 billion - or almost two thirds - are made by firms with foreign investment, including a "significant portion" from America.
A senior Western diplomat told Reuters that there was no sign of any talks at the moment between the two countries, even via back channels.