CARS? PORK? PERFUME? CHINA HAS MANY OPTIONS IF A TRADE WAR BREAKS OUT WITH EUROPE

Now that Europe has announced tariffs on China-made electric cars, the continent is bracing to see if the other shoe drops.

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Will China retaliate with tariffs on European cars, taking aim at Germany's BMW and Mercedes? Would it put tariffs on agricultural products, targeting Europe's politically influential farmers? Or luxury goods from Italy and France?

Analysts warn that an escalating trade war could break out, raising prices for consumers and hurting exporters and their workers on both sides. Both are major markets for each other — China, a rising economy of more than 1-billion people, and Europe with its relatively well-off population of more than 400 million.

"It's a little bit like seeing a slow motion traffic accident unfolding," Jens Eskelund, the president of the European Chamber of Commerce in China said earlier this year. “The accident has not happened yet and ... it is still possible to find an off-ramp. It is getting urgent."

Chinese government officials reiterated this week that they would take "all necessary measures" to protect the rights and interests of Chinese companies.

"China reserves the right to file complaints to the World Trade Organization," said He Yadong, a Commerce Ministry spokesperson. He called on the EU to "correct its wrong practices."