Donald Trump to pull tariff trigger at midnight in trade-war escalation

The European Union is possibly as bad as China just smaller' Trump said on'Sunday Morning Futures on Fox News

Bremmer said both the USA and China have been backing down on former threats about a possible trade war.

Ties between the two neighbors and long-time allies have been strained by U.S. President Donald Trump's decision to impose tariffs on U.S. imports of steel and aluminum on national security grounds.

"China will not bow in the face of threats and blackmail, nor will it be shaken in its resolve to defend global free trade", said ministry spokesman Gao Feng at a press conference. As an example, Chinese companies are reselling United States soybeans, and Chinese companies are expected to cancel most of the remaining soybeans they have committed to buy from the U.S. in the year ending August 31, once the extra tariffs take effect.

China cannot match Trump on tariffs - it imported $130 billion in goods from the United States previous year, compared with America's $505 billion in purchases from China - but it can apply other forms of pressure, analysts say.

"U.S. measures are essentially attacking global supply and value chains. To put it simply, the United States is opening fire on the entire world, including itself", he said.

ANALYST'S TAKE: "We are now two steps removed from the worries of trade tensions as the tariffs deadline looms, locking equity markets in a lackluster trading tone", said Jingyi Pan of IG.

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. US firms in China are already reporting spikes in random inspections at ports.

Chinese state media on Wednesday kept up a steady drum beat of criticism of the United States.

Some prominent Chinese experts say Beijing may have miscalculated the pain the US tariffs could inflict on export manufacturers' already razor-thin margins, and overplayed its hand.

China's exports to the USA grew 5.4 per cent in the first half, 13.9 percentage points lower than for the same period a year ago, according to the General Administration of Customs.

Beijing has made the semiconductor sector a key priority under its "Made in China 2025" strategy, which has shifted up a gear after a US ban on sales to Chinese phone maker ZTE Corp underscored China's lack of domestic chips.

The conflict will escalate further Thursday night when US tariffs on $34 billion of Chinese imports take effect, with Beijing planning to swiftly respond on an equal amount of goods.

A US industry source said: "There is a 99 percent chance that tariffs go into force on Friday".

The Chinese government has promised to respond with tariffs on equal measure soon after Trump's tariffs go into effect.

Coupled with China's vow to retaliate, it has fueled fears the conflict could weigh on global economic growth.

Beijing will impose duties on almost 30 billion dollars of American products. China vowed to match US moves, using both quantitative and qualitative measures. Later in the day, traders will get the minutes from last month's Federal Reserve meeting when it raised US rates for a second time this year.

Here are the top 10 countries most at risk in the event of an all-out global trade war.

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.

"While the Trump administration is anxious about gains and losses, Chinese people have unfaltering confidence in China's future".