China to hike tariffs on USD 60 billion of US goods

Beijing will increase the tariffs to 25 per cent from 10 per cent on June 1, the Chinese Finance Ministry was cited as saying by CNBC.

Beijing:China on Monday announced that it will impose tariffs on $60 billion of US goods from June 1 in retaliation for Washington's decision to hike duties on Chinese goods.

Beijing will increase the tariffs to 25 per cent from 10 per cent and the duties will apply to 5,140 US products, the Chinese Finance Ministry was cited as saying by CNBC.

The move follows US President Donald Trump's decision to raise duties on $200 billion of Chinese products from 10 per cent to 25 per cent as the world's two largest economies failed to produce a breakthrough after months of trade talks.

The latest escalation came shortly after Trump tweeted a warning to China not to retaliate against the extra tariffs he imposed last week.

"China should not retaliate - will only get worse!" the US President posted on Twitter.

China's Global Times newspaper reported that Beijing was also considering cutting orders for new Boeing planes and boycotting US agricultural products.

The development raises the stakes in a widening trade conflict that has rattled investors and threatened to damage the global economy. US stock futures signalled a sharp drop on Monday morning amid the escalation.

Earlier in the day, Trump said China would be "hurt very badly" if the country did not make a deal with the US. He had ordered the tariff raise after talks in Washington with Chinese Vice Premier Liu He ended with no deal in sight.

In a series of tweets on Monday morning, Trump said China had "taken so advantage of the US for so many years".

He suggested that manufacturers who make goods in China could shift production to other countries to avoid the tariffs.

"I say openly to President Xi (Jinping) and 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 and you backed out!" he tweeted.

"Many tariffed companies will be leaving China for Vietnam and other such countries in Asia."

He also claimed that the trade war would not have a significant impact on US trade.

"We are right where we want to be with China. Remember, they broke the deal with us and tried to renegotiate. We will be taking in tens of billions of dollars in tariffs from China. Buyers of product can make it themselves in the USA (ideal), or buy it from non-tariffed countries."

Trump's top economic adviser Larry Kudlow, however, said "both sides will suffer" from the trade dispute.

In an interview with Fox News on Sunday, Kudlow said that it was American businesses that paid the tariffs on any goods brought in from China and that US consumers would also foot the bill if firms passed on the cost increase.