China said Monday it will raise tariffs on $60 billion worth of U.S. goods starting June 1 in retaliation to the latest round of U.S. tariff hikes and Washington’s plans to target almost all Chinese imports.
The announcement came after the latest round of U.S.-China trade negotiations ended Friday without a deal and after Washington increased tariffs on $200 billion worth of Chinese goods.
U.S. President Donald Trump had also ordered the start of a process to impose new duties on another $300 billion worth of Chinese items.
Despite the retaliation, Beijing appeared to give time to find a resolution by setting the June 1 date.
The new rates will target a number of American imports with tariffs ranging from five percent to 25 percent, according to a statement by the Tariff Policy Commission of the State Council – China’s cabinet.
The Chinese response was announced soon after Trump warned Beijing not to retaliate.
I say openly to President Xi & all of my many friends in China that China will be hurt very badly if you don’t make a deal because companies will be forced to leave China for other countries. Too expensive to buy in China. You had a great deal, almost completed, & you backed out!
— Donald J. Trump (@realDonaldTrump) May 13, 2019
“China should not retaliate-will only get worse!” the U.S. president wrote in a series of tweets on trade.
But Beijing appeared to dig in.
“China will never surrender to external pressure,” foreign ministry spokesman Geng Shuang said at a regular briefing Monday.
Global markets remain on red alert over a trade war between the two superpowers that most observers have warned could shatter global economic growth and hurt demand for commodities like oil.
In addition to tariff hikes, China could also use other measures to hit back at the United States, as it imports fewer U.S. products – which limits its ability to match tariffs dollar-for-dollar.
“China may stop purchasing U.S. agricultural products and energy, reduce Boeing orders and restrict U.S. service trade with China,” Hu Xijin, editor of China’s state-run Global Times, wrote on his verified twitter account.
“Many Chinese scholars are discussing the possibility of dumping U.S. Treasuries and how to do it specifically.”
Both sides have indicated that talks will continue, with Beijing’s top trade negotiator, Liu He, saying Friday that they would take place in the Chinese capital at an unspecified date.
In a previous round of tit-for-tat moves, the U.S. imposed 10 percent tariffs on $200 billion of Chinese imports in September.
Beijing announced shortly after that it was hitting over 5,000 categories of U.S. products with tariffs of five to 10 percent.
White House economic advisor Larry Kudlow told U.S. media Sunday that Trump and Chinese President Xi Jinping could meet next month on the sidelines of the G20 summit to hash out their differences on trade, although no new talks are scheduled.
“The two presidents maintain contact through various means,” the Chinese foreign ministry spokesman said, without confirming a possible meeting between the two leaders.
STOCKS PLUNGE: The Dow fell more than 475 points at the open as China announced it will hike tariffs on $60 billion in American-made goods. China is retaliating against tariffs announced by President Trump last week. https://t.co/5yED2IIez7
— NowThis (@nowthisnews) May 13, 2019
Beijing has so far imposed tariffs on $110 billion worth of American goods in retaliation to the U.S. duties.
Trump had already hit a further $50 billion in Chinese goods with tariffs of 25 percent last summer.
The U.S. leader began the standoff last year because of complaints about unfair Chinese trade practices.
The United States is pressing China to change its policies on protections for intellectual property, as well as massive subsidies for state-owned firms, and to reduce the yawning trade deficit.
Since last year the U.S. and China had exchanged tariffs on two-way trade worth hundreds of billions of dollars, gutting U.S .agricultural exports to China and weighing on both countries’ manufacturing sectors.