China retaliates with tariffs on $60bn of US goods

China has hit back at the United States, announcing on Monday that it would raise tariffs on $60 billion (€53.4 billion)worth of US goods after the Trump administration pushed ahead with new punitive duties on Chinese goods on Friday.

Beijing said on Monday that it would raise tariffs on those goods to between 10 per cent and 25 per cent starting on June 1st.

“China’s adjustment of tariff-adding measures is a response to US unilateralism and trade protectionism,” said China’s ministry of finance in a statement.

The fresh escalation in the tit-for-tat tariff battle that has built up over the past year further eroded hopes of a quick resolution to US-China trade discussions and sent US stock futures deeper into the red.

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The response from Beijing comes just three days after the White House more than doubled its levies on $200 billion of Chinese goods to 25 per cent. The Trump administration has threatened to hit a further $300 billion of Chinese imports with the 25 per cent tariff rate if there is no progress in trade negotiations.

In response, China’s finance ministry said on Monday the tariff increase by the US “violates” the agreement between the two countries to resolve their trade differences through talks.

“In order to defend the multilateral trading system and defend its legitimate rights and interests, China has to adjust tariffs on some imported goods originating in the United States,” it added.

For 2,493 items on Beijing’s list – the bulk of the goods hit with the measures – tariffs would be increased by 25 per cent. Those included agricultural items, such as frozen spinach and natural honey, and compounds such as potassium sulphate, commonly used in fertiliser, as well as various manufactured products such as LED lightbulbs.

On two other lists of 1,078 and 974 items, tariffs would be raised by 20 per cent and 10 per cent, respectively. Those lists included many household goods such as toothpaste and bleach along with many types of apparel and related manufacturing equipment, such as men’s swimming outfits and machinery that makes shoes.

A smaller list of 595 items would not see an increase beyond the present level of 5 per cent. Among those items were a number of chemicals and industrial materials such as formaldehyde and lithium. A range of electronic and motorised devices such as starters for the engines of cars, planes and boats, and 3D printers would also be spared an increase.

The White House and US trade representative did not immediately respond to requests for comment regarding China’s retaliation.

It was not the first time that China has said it would increase tariffs on the list of US goods. Last year, while facing earlier threats from the Trump administration, China said it planned to raise tariffs on $60 billion in US exports to China. Some experts expected China to push forward with the threat should it be hit with a new wave of tariffs from the US.

Earlier on Monday, President Donald Trump warned Beijing not to retaliate against the rise in tariffs his administration implemented last week and said China would be "hurt very badly" if it did not agree to a trade deal. – Copyright The Financial Times Limited 2019