With U.S. President Donald Trump ready to slap tariffs on US$50 billion worth of Chinese goods, the question now is how Beijing will respond.
Beijing unveiled a hit list of products that could face duties of up to 25 percent, from fresh fruit to pork and wine, though it stopped short of pulling the trigger as it indicated its readiness to negotiate an agreement.
Fear of a full on trade war between U.S. and China, leading to likely slowdown of global economic growth, brought down stock markets all over the world, including in India. Underscoring that fear, the Dow Jones Industrials fell 723 points on Thursday.
The Chinese embassy in the US released a statement early on March 23, noting that it while China does not want to start a trade war, the country "is not afraid of and will not recoil from a trade war".
Mr Trump has a formidable weapon at his disposal in the Trade Act's 1974 section 301 which allows a President to "take all appropriate action" against any government deemed to restrict U.S. commerce.
Avoid fake news! Subscribe to the Standard SMS service and receive factual, verified breaking news as it happens. Trump has acknowledged China's theft of US intellectual property and has ordered an increase in customs taxes on Chinese products based on Section 301 of the Trade Act of 1974. Electrical goods and tech are the largest USA import item from China.
Trump said he views the Chinese as "a friend", and both sides are in the midst of negotiations.
The measures were specifically in response to United States steel and aluminium tariffs, which were taking effect Friday. "The new measures will primarily target certain products in the technology sector where Beijing holds an advantage over Washington".
Wang said that China's announcement should be seen as a warning to the Trump administration.
Whatever path Beijing chooses, its reaction won't necessarily signal the start of a trade war. "Coming back to the negotiation table is a relatively good result", Wang said.
Making metals more expensive will annoy a lot of manufacturers - tens of thousands - that buy them to produce everything from washing machines to beer cans.
The new import duties will target industrial sectors where "China has sought to acquire an advantage through the unfair acquisition or forced technology transfer from USA companies", senior White House economic advisor Everett Eissenstat told reporters.
Lighthizer indicated the industries could include aerospace, maritime and rail transport equipment, and new energy vehicles.
The measure also directs the US Treasury to develop new proposals to increase safeguards against investments that could compromise US national security.
China can also threaten USA companies' access to its government procurement market, which China says is worth 3.1 trillion yuan (US$490 billion).
The senior United States official said Washington was "very optimistic" that allies such as Europe, Japan and Australia would join its WTO case.
"I have determined that the necessary and appropriate means to address the threat to the national security posed by imports from steel articles from these countries is to continue these discussions and to exempt steel articles imports from these countries from the tariff, at least at this time", according to Trump's proclamation released by the White House.
But the European Union said it would "reserve its rights" to impose countermeasures as long as the exemption remained temporary.
For the United States consumer, there will be little impact as well.
China has a $375 billion trade surplus with the United States.
American industry, agriculture in particular, as well as members of the president's own Republican party have voiced strident opposition to his recent trade moves. But "it's inevitable that Chinese companies develop and sell products similar to those of American companies through contract electronics manufacturers", a senior official at a Japanese manufacturer said.
Trump is planning to impose the tariffs over what his administration says is misappropriation of USA intellectual property.