China announced Monday that it will impose tariffs on $60 billion worth of American products starting June 1 – an apparent retaliation to President Trump’s decision to hike duties on goods from the country.
Beijing will slam a number of US imports with tariffs ranging from 5 percent to 25 percent, according to a statement by the Tariff Policy Commission of the State Council.
The announcement follows Trump’s decision to raise duties on $200 billion in Chinese products to 25 percent from 10 percent as the world’s two largest economies struggle to reach a new trade deal.
Trump also ordered the start of a process to impose new duties on another $300 billion worth of items from China.
The Chinese response about imposing tariffs on more than 5,000 US products came shortly after Trump warned Beijing not to retaliate.
“China should not retaliate-will only get worse!” he wrote in a series of tweets on trade.
But Beijing was unmoved.
“China will never surrender to external pressure,” foreign ministry spokesman Geng Shuang said at a regular briefing Monday.
Global markets remain on high alert over a trade war between the two superpowers that most experts have warned could shatter global economic growth, and hurt demand for commodities like oil.
The duties in large part target the American agriculture industry, and include products such as peanuts, sugar, wheat, chicken and turkey, according to CNBC.
Wall Street’s main indexes were set to drop almost 2 percent Monday after Beijing’s announcement. Futures pointed to an almost 500-point fall at the open for the Dow Jones Industrial Average index, with Apple down 3.8 percent, according to Reuters.
“This just got messier and more expensive to the global economy and until we get break here, markets are going to be under pressure,” Art Hogan, chief market strategist at National Securities in New York, told Reuters.
“Every increase in tariffs is a drag to the global economy and if it drags the economy down, it will drag earnings down, so stocks are going to react to that,” he added.
Over the weekend, US officials sought promises of concrete changes to Chinese law and Beijing said it would not swallow any “bitter fruit” that harmed its interests.
The tensions swept through global financial markets, with the yield curve between three-month US Treasury bills and 10-year notes inverting for the second time in under a week Monday.
An inversion in the yield curve is seen as a classic signal that a recession is on the horizon.
With Post Wires