Reacting swiftly to the US move overnight to hike import duties, China has announced new tariffs on US goods worth USD 50 billion.
On backlash of overnight import duty hike by US, China has come up with new tariffs on US goods.
The effective start date for the new charges is not announced, though China’s Ministry of Commerce says the tariffs are designed to target up to $50 billion of U.S. products annually.
The 25 percent levy on U.S. imports includes products such as soybeans, cars and whiskey.
The full list of US products that China is planning to hit with tariffs can be found below
HOW THE STORY UNFOLDED
The move comes less than 24 hours after President Donald Trump unveiled a list of Chinese imports that he aims to target as part of a crackdown on what he deems as unfair trade practices.
Sectors covered by Trump’s proposed tariffs include products used for robotics, information technology, communication technology and aerospace.
China has accused Trump of damaging the global system of trade regulation by taking action under US law instead of through the WTO.
The trade showdown between Washington and Beijing has rattled investors and fueled market fears that the dispute could soon spiral into a full-blown trade war.
WHAT IS AT STAKE?
The United States and China have the world’s biggest trading relationship. That gives them an incentive to reach a settlement to avoid damaging many businesses on both sides.
Exports to China directly or indirectly supported 1.8 million new US jobs in 2015, according to the US-China Business Council, an industry group.
Wednesday’s Chinese tariff hike targeted goods including soybeans, the biggest US export to China, and aircraft.
Economists and investors worry other governments might respond by raising their own import barriers. That might chill commerce and set back a global economic recovery.
WHAT’S LIKELY TO COME NEXT?
Chinese officials have acknowledged their country has more to lose in a full-blown conflict with Washington but say they will endure the cost.
Beijing has options for retaliating against US companies operating in China. Regulators could withhold licenses or alter other conditions to hamper foreign business activity.
Some economists have suggested Washington could target state-owned enterprises that dominate industries including energy, telecoms and banking.
Europe and Japan also have grumbled about the monopolies and other privileges given to SOEs. Washington may try to get them to jointly pressure Beijing for change.
Stock Markets Plunge
Following the tariff announcement by China on US goods, Asian indices plunged in the trade and closed sharply lower.
Dow Futures and Nasdaq futures went down sharply and likely to open lower.