China has hit back at Donald Trump’s tariff hike by announcing increased penalties on $60 billion of US imports, as the trade war between the two countries intensifies.
The emerging superpower said it would hit American-made goods with a 25% rate, up from 10%.
It follows Trump’s decision to increase a 10% tariff on around $200bn of Chinese goods imported into America to 25%.
China’s move came after the US president goaded Xi Jinping, the Chinese head of state, for “backing out” of an “almost completed” trade deal.
The trade spar has worried investors and world markets.
No more talks between the countries are planned, according to CNBC, which first reported the news of China’s tariff hike.
China had vowed “necessary countermeasures” on Friday against Trump’s escalation of the tariff conflict.
Beijing is running out of US imports for penalties due to the lopsided trade balance between the world’s two largest economies.
Regulators have targeted American companies in China by slowing down customs clearance for shipments and processing of business licences.
The new tariffs are likely to hurt exporters on both sides, as well as European and Asian companies that trade between the United States and China or supply components and raw materials to their manufacturers.
The increases already in place have disrupted trade in goods from soybeans to medical equipment and sent shockwaves through other Asian economies that supply Chinese factories.
Forecasters have warned that the US tariff hikes could disrupt a Chinese recovery that had appeared to be gaining traction. Growth in the world’s second-largest economy held steady at 6.4% over a year earlier in January-March, supported by higher government spending and bank lending.
The tensions “raise fresh doubts about this recovery path,” said Morgan Stanley economists Robin Xing, Jenny Zheng and Zhipeng Cai.