Deepening a trade battle and sending financial markets into a tailspin, China announced Monday it was raising tariffs on $60bn of US goods in retaliation for the latest hike in US tariffs on its exports.
The move comes after the United States escalated a bitter trade war with a tariff hike on $200bn of Chinese products.
China will impose tariffs on a total of 5,140 US products from June 1, the ministry said in a statement.
“China’s adjustment on additional tariffs is a response to US unilateralism and protectionism,” the ministry said. “China hopes the US will get back to the right track of bilateral trade and economic consultations and meet with China halfway.”
The retaliatory measures were announced about an hour after US President Donald Trump tweeted directly to Chinese President Xi Jinping saying: “China will be hurt very badly if you don’t make a deal because companies will be forced to leave China for other countries.
Markets immediately slumped with the Dow and S&P down more than 2 percent. The tech heavy Nasdaq dropped 2.5 percent.
China’s finance ministry said the new penalty duties of 5 percent to 25 percent will affect thousands of US products – including batteries, spinach and coffee.
That followed Trump’s increase on Friday of duties on $200bn of Chinese imports from 10 percent to 25 percent after alleging that China backtracked on commitments it made in earlier negotiations in a dispute over Beijing’s technology ambitions and perennial trade surplus.
On Monday, the US president tweeted to Xi that China “had a great deal, almost completed, & you backed out!”