China denies it will be first to impose tariffs on $34bn of US goods

China has denied it will fire the opening salvo in an escalating trade dispute with the US, insisting that it would not bring in 25% tariffs on $34bn (£26bn) of American goods before a move from Washington.

Both sides have threatened to impose similarly sized tariffs on 6 July, but because of the 12-hour time difference, it was thought the Chinese tariffs on US imports ranging from soybean to stainless steel pipes could take effect earlier.

However, China’s finance ministry issued a statement on Wednesday saying that it would not be the first to levy tariffs.

“The Chinese government’s position has been stated many times. We absolutely will not fire the first shot, and will not implement tariff measures ahead of the United States doing so.”

The US will implement a 25% tariff on $34bn of Chinese imports – 818 product lines ranging from cars to vaporisers and “smart home” devices – on Friday.

There had been hopes the US and China might step away from the measures, but neither side has backed down. Economists have warned that the tariffs will damage economic growth and cost jobs, and could escalate into a full-blown trade war between the world’s two largest economies.

Last month, the Mercedes-Benz maker Daimler became the first major company to issue a profit warning on the back of the trade dispute. The German business makes Mercedes SUVs in the US and ships them to China, its biggest market.

Donald Trump has threatened to escalate the conflict by imposing further tariffs on up to $200bn of Chinese goods, if Beijing retaliates on Friday.

China’s stock market fell sharply on Wednesday as traders worried about the escalating trade dispute. The benchmark Shanghai Composite index dropped 1% to finish the day at 2,759 points, its lowest closing point since March 2016.

US markets are closed for Independence Day. They moved lower on Tuesday.

Michael Hewson, the chief market analyst at CMC Markets UK, said: “In a holiday-shortened US session before the 4 July holiday, US equity markets finished lower on the day as trade concerns kept investors cautious.

“Sharp moves in the Chinese currency prompted speculation that Chinese authorities were manipulating the rate in order to offset some of the worst effects of US tariffs.”