China promises to hit US with tariffs as stocks plunge amid fear of trade war

China has retaliated against Donald Trump’s decision to impose tariffs on steel and aluminium by signalling that it will hit US goods such as pork, apples and steel pipe with higher duties.

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As Asian stock markets plunged at the propsect of a trade war between the world’s two biggest economies, China’s commerce ministry urged Washington to negotiate a settlement as soon as possible but set no deadline.

A ministry statement on Friday said the higher US tariffs “seriously undermine” the global trading system.

“The Chinese side urges the US side to resolve the concerns of the Chinese side as soon as possible,” the ministry said. It appealed for dialogue “to avoid damage to overall Chinese-US cooperation.”

The Dow Jones industrial average dropped 724 points, or nearly 3%, after Trump’s announcement on Thursday, and Asian markets followed suit in Friday’s session.

The Nikkei in Tokyo was down almost 4% at 1.15am GMT while in Australia, which exporets more iron ore to China than sany other country, the ASX200 benchmark index was off 1.8%. The Kospi in Seoul was down 2%. Shares in Hong Kong and Shanghai were expected to fall sharply when trading begins later on Friday.

Goods targeted for possible higher Chinese tariffs include wine, apples and ethanol, which would hit agricultural areas where voters supported Trump in the 2016 presidential election.

The ministry said China bought about $1bn worth of those goods last year. They would be hit with a 15% tariff increase, mirroring the US duty hike of 15% on aluminum.

A second group of products targeted for a possible 25% tariff, mirroring the higher American charge on steel, includes pork and aluminum scrap, according to the ministry.