China has urged the United States to "pull back from the brink" as President Donald Trump's plans for tariffs on up to $60bn of Chinese goods moved the world's two largest economies closer to a trade war.
The escalating tensions between the two powers has sent shivers through financial markets as investors foresaw dire consequences for the global economy if trade barriers start going up.
Mr Trump is planning to impose the tariffs over what his administration says is misappropriation of US intellectual property.
A probe was launched last year under Section 301 of the 1974 US Trade Act.
"China doesn't hope to be in a trade war, but is not afraid of engaging in one," the Chinese commerce ministry responded in a statement.
"China hopes the United States will pull back from the brink, make prudent decisions, and avoid dragging bilateral trade relations to a dangerous place."
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In a presidential memorandum signed by Mr Trump yesterday there will be a 30-day consultation period that only starts once a list of Chinese goods is published.
That effectively creates room for potential talks to address Mr Trump's allegations on intellectual property theft and forced technology transfers.
Though the White House has said the planned tariffs were a response to China's "economic aggression," Mr Trump said he views China as "a friend", and both sides are in the midst of negotiations.
A Chinese commerce ministry official said both sides were in touch, and communication channels were smooth.
Meantime, China showed readiness to retaliate by declaring plans to levy additional duties on up to $3bn of US imports including fresh fruit, wine and nuts.
That move is in response to imports tariffs Mr Trump announced earlier this month on steel and aluminium, which were due to go into effect today.
The inevitable fall in demand from a full-blown trade war would spell trouble for all the economies supplying the US and China.
Alarm over Mr Trump's protectionist leanings mounted earlier this month after he imposed the tariffs on steel and aluminium under Section 232 of the 1962 US Trade Expansion Act, which allows safeguards based on "national security."
Mr Trump has granted Canada, Mexico, Argentina, Australia, Brazil and South Korea and the European Union temporary exemptions to those measures.
China was not exempted even though it was a far smaller supplier than Canada or South Korea.
Also omitted from the exemption list was US ally Japan, though a government spokesman said Tokyo would press to be included.
