China has said it plans to impose tariffs on $60bn worth of US goods in the latest escalation of a trade war between the world’s two biggest economies.
Beijing’s finance ministry said it would target 5,140 US products including batteries, spinach and coffee from 1 June, with penalty duties of 5% to 25%.
US markets opened sharply lower following the announcement, with the Dow Jones Industrial Average and the S&P 500 down by nearly 2%.
Neil Wilson, chief market analyst at Markets.com, said: “Make no mistake this is a serious escalation and we have a trade war on our hands again.
“The breakdown last week has not proved temporary and it seems China is prepared to go toe-to-toe with the US on this.”
It comes after the Trump administration last Friday raised tariffs on $200bn of Chinese imports from 10% to 25% – saying China had backtracked on commitments it made during talks.
Donald Trump’s top economics adviser Larry Kudlow admitted over the weekend that both countries would be hurt by a trade war – including US businesses and consumers hit by the impact of higher duties on imported goods.
But the president has remained bullish, tweeting hours later that “we are right where we want to be with China”.
On Monday he took to social media again, reiterating his view that China “has taken advantage for so many years” and warning: “China should not retaliate – will only get worse.”
Markets have been through a turbulent period over the last week amid fears about the renewed escalation in tensions between the two countries – and the consequences of a full-blown trade war which could hold back global growth.
Mr Trump began raising tariffs last July over complaints that China steals, or pressures US companies to hand over, technology.
Source: SKY NEWS