The trade war between the United States and China escalated on Friday as Beijing threatened to unleash "countermeasures" against US plans to impose tariffs on $300 billion in Chinese goods.

President Donald Trump jolted US and Asian stock markets as he issued the threat just a day after US and Chinese trade negotiators revived talks aimed at ending the year-long dispute.

"China expresses its strong dissatisfaction and resolute opposition to this," foreign ministry spokeswoman Hua Chunying said at a regular press briefing.

"If the US implements the tariff measures, China will have to take necessary counter-measures to resolutely defend the core interests of the country and its people," Hua said, adding that Beijing did not want a trade war "but is not afraid to fight one if necessary."

She did not specify what kind of measures China would take, but in the past Beijing has hinted that it could restrict exports of rare earths that are vital to the US technology industry, and it is also drawing up a blacklist of "unreliable" foreign companies.

Trump's announcement means virtually all of the $660 billion in annual two-way trade between the world's two biggest economies will have tariffs on it.

China has imposed tariffs on $110 billion in American goods, almost all of the products it imports from the US.

Trump said 10 percent duties on $300 billion will take effect September 1, and come on top of the 25 percent tariffs on $250 billion in Chinese imports already in place.

Trump later raised the possibility he could increase the duties to "well beyond" 25 percent. "The 10 percent is... for a short-term period and then I can always do much more or I can do less, depending on what happens with respect to a deal," he said at the White House.

After resuming face-to-face talks in Shanghai this week, trade negotiators were set to reconvene in Washington in early September for another round of discussions, which means they will take place just after the new tariffs take effect.

"Slapping on tariffs is definitely not a constructive way to resolve economic and trade frictions, it's not the correct way," Chinese Foreign Minister Wang Yi said on the sidelines of a regional meeting of top diplomats in Bangkok on Friday.

- 'Predatory tactics' -

When he announced the tariffs on Twitter, Trump said Beijing had agreed "to buy agricultural product from the US in large quantities but did not do so."

Just hours earlier, China had said it had started to make more purchases of US farm goods.

"Additionally, my friend President Xi said that he would stop the sale of fentanyl to the United States -- this never happened, and many Americans continue to die!" Trump said, referring to the highly potent and addictive opioid.

US Secretary of State Mike Pompeo directed more criticism at China at the meeting of Southeast Asian nations that Wang also attended in Bangkok.

"China has taken advantage of trade... It's time for that to stop," Pompeo said, accusing Beijing of "protectionism" and "predatory tactics" to give its companies an advantage in global markets.

Washington has accused China of using a state-directed economic model, unfairly subsidising production and stealing US technology.

Trade relations with China have swung between progress and disaster, appearing to collapse in May only to be revived two months later after Trump and Chinese President Xi Jinping agreed to a truce at a meeting in June.

"We expect this (tariffs) step to make China less keen to achieve a deal and more determined to prepare itself for long-term economic tension with the US," Oxford Economics said in a note.

The Chinese commerce ministry said in a statement that the new tariffs are a "serious violation" of the ceasefire.

"The core motivation is the talks clearly weren't going to go anywhere without more pressure on the Chinese," said Derek Scissors, an expert on US-China economic ties at the American Enterprise Institute, a conservative think tank.

"Of course, they could react badly now and the talks could end entirely. It's a measured risk," he told AFP.

- 'Not concerned' -

In prior tariff rounds, US officials had worked to prevent the higher costs from hitting popular consumer items.

But the new duties, coming just before the holiday shopping season, will cover the vast expanse of everyday Chinese-made goods and consumer electronics -- smartphones, baby carriages, tampons, watches and toys.

Trump has falsely claimed China pays for his mounting tariffs. But Democrats in Congress and business groups say the measures are taxing ordinary consumers and making household goods more expensive.

While other parts of the US economy have begun to slow, the dominant retail sector has been a bright spot, helping to bolster growth despite the general slowdown in most other industrialised nations.

Industries as varied as fashion and oilfield services had pleaded with the Trump administration to hold fire, warning of layoffs, lost markets and fading industrial dominance.

Latest Trump tariffs to directly hit consumers
New York (AFP) Aug 1, 2019 - Earlier US tariffs enacted in President Donald Trump's trade war with China have dealt only a glancing blow to consumers, but those announced Thursday are different.

"This hits consumers straight on," Steve Pasierb, president of the Toy Association, said in an interview. "This is finished products. It's not raw materials."

The tariffs, a 10 percent levy on $300 billion in Chinese goods that Trump said would go into effect on September 1, is expected to affect just about all finished products imported from China.

Items that will likely have a levy include hairdryers, sneakers, flat screen televisions, bridal wear and other special occasion apparel.

The prospect of such broad-based tariffs has loomed over retailers for months and has been referred to as the "boogeyman" outcome by some in consumer-facing industries.

"It's very unfair to the American consumer. It's very unfair to the manufacturer and it shouldn't be happening," said Stephen Lang, chief executive of Mon Cheri Bridals in New Jersey and the head of the American Bridal & Prom Association.

Lang said that a 10 percent levy was less onerous than the 25 percent tariff that has been discussed and which he has previously described as catastrophic.

But Trump said Thursday he could lift the levy to "well beyond 25 percent," referring to the 10 percent level as "for a short-term period."

"We have too much testosterone between this government and their government, and we're getting caught in the crossfire," Lang said.

- Retail shares hit -

Leading trade groups criticized the announcement.

"We support the administration's goal of restructuring the US-China trade relationship. But we are disappointed the administration is doubling down on a flawed tariff strategy," said National Retail Federation senior vice president David French.

"These additional tariffs will only threaten US jobs and raise costs for American families on everyday goods."

"Retaliatory tariffs, whether 10 percent or 25 percent, are bad policy," said Gary Shapiro, president of the Consumer Technology Association. "Tariffs are taxes paid for by US consumers, not China's government. These retaliatory tariffs are not an effective trade policy and may violate US law."

Shares of retailers fell sharply Thursday, with the biggest drops affecting a group that included Best Buy, Target and Macy's. Others to decline included Apple and Nike.

Retail giants Amazon and Walmart also dipped, but by less than most of their rivals because they are viewed as having more leverage with suppliers.

During an earnings conference call in May, Walmart Chief Financial Officer Brett Biggs said the company's merchant teams have been focused on tariffs "for months and continue to execute appropriate mitigation strategies," as he warned that some pricing impact was inevitable.

"We're going to continue to do everything we can to keep prices low. It's who we are," Biggs said. "However, increased tariffs will lead to increased prices for our customers."

Best Buy declined to comment Thursday, but argued against tariffs during a public comment period in June.

In a letter to United States Trade Representative Robert Lighthizer, Best Buy noted that the Trump administration had previously not imposed tariffs on flat screen televisions, laptops and other consumer items.

"Best Buy respectfully submits that USTR should not impose tariffs on the above-referenced consumer economics, just as it did last year when it wisely chose to forego imposing tariffs on flat panel televisions and other consumer electronic devices because of the negative impacts on the US consumers and economy," the company said.

- Threat to economy? -

Thursday's move could threaten US consumer spending, a bedrock of support of the American and global economy that has continued to show strength in economic indicators even as manufacturing and corporate spending trends have weakened.

Pasierb of the Toy Association said the impact of the tariffs may be mitigated in his industry somewhat because many retailers have imported goods earlier this year because of tariff risk.

But broad-based tariffs are a concern "because if all these goods become more expensive, you won't have as much discretionary money for toys," he said.

"My deep concern is that this is going to hit spending in the last three months of the year, which is our make-or-break period."

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