CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76% of retail investor accounts lose money when trading CFDs with this provider.You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.

China to adopt necessary countermeasures if US escalates on the trade war: Commerce Ministry

In a separate announcement announced on the same day, China’s foreign ministry said that it is seriously concerned about the US arms sales to Taiwan, and urged the US to stop the sale to avoid harming bilateral relations.

China’s commerce ministry has stepped forward to say that the country will adopt necessary countermeasures if the US decides to unilaterally escalate trade tensions, the ministry’s spokesman Gao Feng said at a media briefing on Thursday.

The US’ use of ‘ultimate pressure’ has created serious setbacks to the trade negotiations, Mr Gao said, according to a Reuters report, although there was no specific mention of what the action was. This is after the US President Donald Trump reiterated his threat to levy additional tariffs on US$300 billion of Chinese goods.

In a separate announcement announced on the same day, China’s foreign ministry said that it is seriously concerned about the US arms sales to Taiwan, and urged the US to stop the sale to avoid harming bilateral relations.

The US is said to be pursuing the sale of more than US$2 billion worth of tanks and weapons to Taiwan, people familiar with the negotiations told Reuters who broke the news on Thursday. The US is the main arms supplier to Taiwan.

The move from US is unavoidably going to anger China, as the Chinese country is not on the best terms with Taiwan due to their past issues. China regards Taiwan as its own but Taiwan has self-declared its independence.

China has long warned the US to not get involved in its affair with Taiwan

The US has been increasing its involvement in the diplomatic ties in Taiwan and China in recent years but China has been warning the western country to stay away.

China has long been trying to add Taiwan into its territory, calling the unification ‘inevitable’, threatening the use of military force as an option if the smaller country does not comply.

Both countries have a deep-seated conflict with each other. In 1949, Chinese leader Mao Zedong’s communist party took power over Beijing, defeating Chiang Kai-shek’s Kuomintang (KMT) and causing them to flee to Taiwan. The KMT then formed their owned government in Taipei, cutting off all ties with mainland China and became an ally of the US.

China and Taiwan have had a fragile reconciliation for a few decades, from 1987 to 2016. In that period, the US backed the policy of "one China", with Beijing as the legitimate government, but establishes trade and military ties with Taipei.

In 2016, China suspended all communications with Taiwan after the island's new government failed to acknowledge the concept that there is only "one China".

In December 2016, President-elect Donald Trump broke decades of US diplomatic policy by speaking directly, via telephone, with Taiwan’s president Tsai Ing-wen.

In 2017, the Trump administration approved US$1.4 billion worth of arms sales to Taiwan, a move which angered Beijing.

In September last year, the US state department permitted the sale of spare parts for F-16 fighter jets and other military aircraft worth up to US$330 million to Taiwan. Back then, China had already warned the US that the act jeopardizes the relations between the US and China.


This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

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