China Trade

In this May 9, 2019, photo a General Electric washing machine with a label advertising it was made in America is displayed in retail stores in Cranberry Township, Pa. China has announced tariff hikes on $60 billion of U.S. goods in retaliation for President Donald Trump's escalation of a fight over technology and other trade disputes. The Finance Ministry said Monday, May 13, the penalty duties of 5% to 25% on hundreds of U.S. products including batteries, spinach and coffee take effect June 1. (AP Photo/Keith Srakocic)

BEIJING (AP) — Sending Wall Street into a slide, China announced higher tariffs Monday on $60 billion worth of American goods in retaliation for President Donald Trump’s latest penalties on Chinese products.

Duties of 5% to 25% will take effect on June 1 on about 5,200 American products, including batteries, spinach and coffee, China’s Finance Ministry said.

With investors worried about the potential economic damage on all sides from the escalating trade war, the Dow Jones Industrial Average fell 617 points, or 2.4%, and the technology-heavy Nasdaq plunged 270 points, or 3.4%, its biggest drop of the year. Earlier, stocks fell in Europe and Asia.

“We appear to be in a slow-motion train wreck, with both sides sticking to their positions,” said William Reinsch, a trade analyst at the Center for Strategic and International Studies and a former U.S. trade official. “As is often the case, however, the losers will not be the negotiators or presidents, but the people.”

Beijing’s move came after the U.S. raised duties Friday on $200 billion of Chinese imports to 25%, up from 10%. In doing so, American officials accused China of backtracking on commitments it made in earlier negotiations. The same day, trade talks between the two countries broke up without an agreement.

On Twitter, Trump warned Xi that China “will be hurt very badly” if it doesn’t agree to a trade deal. Trump tweeted that Beijing “had a great deal, almost completed, & you backed out!”

The rising trade hostilities could damage the economies of both countries. The tariff increases already in place have disrupted trade in such American products as soybeans and medical equipment and sent shockwaves through other Asian economies that supply Chinese factories.

Still, the two countries have given themselves something of an escape hatch: The higher Chinese tariffs don’t kick in for 2½ weeks. The U.S. increases apply to Chinese goods shipped since Friday, and those shipments will take about three weeks to arrive at U.S. seaports and become subject to the higher charges.

Also, both countries have indicated more talks are likely. Top White House economic adviser Larry Kudlow said on Sunday that China has invited U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin to Beijing. Trump said Monday that he expects to meet Chinese President Xi in late June at the G-20 summit in Osaka, Japan.

(0) comments

Welcome to the discussion.

Keep it Clean. Please avoid obscene, vulgar, lewd, racist or sexually-oriented language.
PLEASE TURN OFF YOUR CAPS LOCK.
Don't Threaten. Threats of harming another person will not be tolerated.
Be Truthful. Don't knowingly lie about anyone or anything.
Be Nice. No racism, sexism or any sort of -ism that is degrading to another person.
Be Proactive. Use the 'Report' link on each comment to let us know of abusive posts.
Share with Us. We'd love to hear eyewitness accounts, the history behind an article.