China has said it will impose higher tariffs on a range of US goods, including frozen vegetables and liquefied natural gas, striking back in a trade war with Washington despite a warning not to from President Donald Trump.
- China said the tariffs would take effect on June 1
- Global equities fell sharply with major US indexes down more than 2 per cent
- China warned US policies were threatening the existence of the World Trade Organization
The move, widely expected after the United States last week raised tariffs on $200 billion in Chinese imports, heightened fears the world’s two largest economies were spiralling into a no-holds-barred dispute that could derail the global economy.
China’s finance ministry said it planned to set import tariffs ranging from 5 per cent to 25 per cent on 5,140 US products on a revised $60 billion target list. It said the tariffs would take effect on June 1.
“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.”
Global equities, which slumped last week on the escalating tensions, fell sharply, with major US indexes down more than 2 per cent.
Investors sought safety in US bonds while the US dollar slipped against a basket of currencies.
“It’s clear that there is a lot of nervousness around the US-China trade negotiations and concern that it’s really deteriorating pretty significantly, and that’s impacting all areas of markets,” said Kristina Hooper, chief global market strategist at Invesco in New York.
China say US threaten existence of WTO
China further warned on Monday that US policies were threatening the existence of the World Trade Organization, setting out a string of grievances in a WTO “reform proposal” published by the WTO on its website.
China did not name the United States in the document, but referred to the block on appointment of WTO appeals judges and “national security” tariffs on aluminium, steel and cars, policies uniquely associated with Washington.
Earlier on Monday, Mr Trump told China not to intensify the trade dispute and urged its leaders, including President Xi Jinping, to continue to work to reach a deal.
“China should not retaliate — will only get worse,” he said on Twitter.
“I say openly to President Xi & 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,” Mr Trump wrote.
The US president, who has embraced protectionism as part of an “America First” agenda, stepped up his verbal attacks on China on Friday after two days of high-level trade talks in Washington ended with the two sides at an apparent stalemate.
The White House and US Trade Representative’s office did not immediately respond to requests for comment.
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