Beijing’s response to the US plan to impose new tariffs on up to $60bn in annual imports from China is likely to be a carefully calibrated mixture of strong rhetoric, measured retaliation and a sprinkling of inducements.
“China has unambiguously warned they will retaliate but China’s initial response will probably be measured,” said Alex Wolf, an economist at Aberdeen Standard Investments and a former US diplomat in China.
“They are very keen to avoid a trade war so their response will be firm but proportionate with the hope that the US does not further escalate,” he added.
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