China on Tuesday said it is “fully prepared” for a trade war with the U.S., according to The Associated Press.

Foreign Ministry spokesman Lu Kang told reporters that China hopes the U.S. will “do something conducive to the mutual trust,” but that the country is prepared to take “necessary measures” when the U.S. imposes tariffs on Chinese goods this week.

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The U.S. is planning to slap $34 billion worth of tariffs on Chinese goods starting July 6, and China has pledged to respond with retaliatory tariffs of the same amount.

The comments from the Foreign Ministry mark the latest escalation in the U.S.-China trade war.

Chinese tariffs will hit U.S. agricultural products like soybeans, corn and wheat, and the tariffs will also apply to automobiles, beef, pork and seafood.

U.S. companies, including automakers Tesla and Ford, are expected to suffer financial losses once the tariffs are imposed, according to the AP, which also reported that China’s stock market has fallen almost 10 percent in recent weeks due to the trade war.

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