China's commerce ministry on Thursday accused the United States of being "capricious" over bilateral trade issues, and warned that the interests of U.S. workers and farmers ultimately will be hurt by Washington's penchant for brandishing "big sticks." Previous trade negotiations with the United States were constructive, but because the U.S. government is being unpredictable and challenging, Beijing has had to respond in a strong manner, commerce ministry spokesman Gao Feng told a regular briefing in Beijing. President Donald Trump threatened on Monday to hit $200 billion of Chinese imports with 10 percent tariffs if Beijing retaliates against his previous announcement to target $50 billion in imports. The United States has alleged that China is stealing U.S. intellectual property, a charge denied by Beijing. Washington's accusations of forced tech transfers are a distortion of reality, and China is fully prepared to respond with "quantitative" and "qualitative" tools if the U.S. releases a new list of tariffs, Gao said.

Farmer John Duffy (L) and Roger Murphy load soybeans from a grain bin onto a truck before taking them to a grain elevator on June 13, 2018 in Dwight, Illinois. U.S. soybean futures plunged with renewed fears that China could hit U.S. soybeans with retaliatory tariffs if the Trump administration follows through with threatened tariffs on Chinese goods. Getty Images

China could hit back at U.S. firms listed on the Dow Jones Industrial Average if Trump keeps heightening tensions with Beijing over trade, state-controlled Chinese tabloid The Global Times said on Thursday. The 30-stock Dow, which counts Boeing, Apple, and Nike among its constituents, fell 0.17 percent on Wednesday and has declined 0.25 percent this year. "It is deeply regrettable that the U.S. has been capricious, escalated the tensions, and provoked a trade war," Gao said. "The U.S. is accustomed to holding 'big sticks' for negotiations, but this approach does not apply to China." White House trade adviser Peter Navarro, who views China as a hostile economic and military power, said on Tuesday that Trump's actions are a necessary defense of the "crown jewels" in the U.S. economy. None of the U.S. administration's efforts to negotiate with Beijing has yielded progress on changing China's "predatory" trade practices, Navarro said. He maintained that China had more to lose from a trade war.

Open conflict

Financial markets are worried about an open trade conflict between the world's two biggest economies after three rounds of high-level talks since early May failed to reach a compromise on U.S. complaints about Chinese practices and its record deficit with China. Last year, the deficit was about $375 billion, as China imported $129.89 billion of U.S. goods, while the United States purchased $505.47 billion of Chinese products, according to U.S. data. A Sino-U.S. trade war could disrupt global supply chains for the tech and auto industries, sectors heavily reliant on outsourced components, and derail world growth. "U.S. unilateral protection measures will ultimately harm the interests of U.S. companies, workers, and farmers," Gao told reporters. British forecaster Oxford Economics, in a recent note, said it "will not be easy for the U.S. to identify $200 billion worth of Chinese imports that it can levy tariffs on without hurting U.S. companies and/or consumers, given the strong involvement of U.S. companies in a large share of China's exports to the U.S." Gao said that China and the U.S. are due to negotiate on issues around the manufacturing and service industries "in the near future."

Even more tariffs