China Retaliates With Tariff Hike on US Goods Worth $60 Billion

Donald Trump and Xi Jinping.

(Photo: Altered by The Quint)

China on Monday, 13 May increased tariffs on 60 billion dollars worth of US goods in a tit-for-tat to America's move to raise tariffs on 200 billion dollars worth of Chinese imports, saying Beijing will not "succumb to foreign pressure."

China's retaliation came hours after US President Donald Trump warned his Chinese counterpart Xi Jinping that Beijing "will be hurt very badly if you don't make a deal."

In the latest escalation of the trade war between the world’s two biggest economies, the Chinese Ministry of Finance said tariffs on 60 billion dollars of US exports to China would rise by “25, 20 and 10 percent” respectively.

Products that were taxed at five percent would not be affected.

The statement came days after the US raised tariffs on 200 billion dollars worth of Chinese imports from 10 percent to 25 per cent on Friday after the 11th round of trade talks held in Washington failed to resolve the trade fight.

The Chinese Ministry of Finance said that the move was “a response to unilateralism and trade protectionism”.

‘Hope US Meets China Halfway’

Tariff war began between the two countries in April last year with China retaliating with 110 billion dollars worth of tariffs on US goods in response to Washington's increase of tariffs on Chinese goods.

"China hopes the US will return to the right track of bilateral trade negotiations, work together with China and meet China halfway to reach a mutually beneficial and win-win agreement on the basis of mutual respect and equality, it said in the statement coinciding with the commencement of US stock markets.

Last week, US slapped additional tariffs on 200 billion dollars worth of Chinese goods with President Trump threatening to impose tariffs on all Chinese imports alleging that Beijing is going back on commitments agreed earlier.

According to official figures, China’s exports to US last year totaled to 539.5 billion dollars and total US goods imported by China amounted to 120 billion dollars in about 660 billion dollars in total trade.

‘China Will Never Succumb to Foreign Pressure’

Hours before the tariff raise, the Chinese Foreign Ministry asserted that it will "never succumb to foreign pressure" after Trump warned President Xi 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."

Asked about Trump's threat to impose tariffs on all Chinese imports which totalled to 539.5 billion dollars last year after the just concluded 11th round of talks failed to make head way to end the trade war between the top countries, Chinese Foreign Ministry spokesman Geng Shuang said "we have repeatedly stated that raising tariffs won't be any problem."

"Too expensive to buy in China. You had a great deal, almost completed, & you backed out!" Trump said, ramping up his remarks against Beijing after the collapse of trade negotiations with China.

“China will never succumb to foreign pressure. We are determined and capable to safeguard our legitimate rights and interests,” he said.

"We still hope that the US will meet halfway and try to solve the issues between us on the basis of mutual respect, equality and mutual benefit. This is in line with both sides interests and is the aspiration of the international community," he said.

Geng also did not confirm reports about a likely meeting between Trump and Xi at the G20 meeting in Tokyo scheduled to be held next month.

‘Washington Risks Making Mistake After Mistake’

Earlier, the ruling Communist Party of China (CPC) mouthpiece - the People's Daily - in a front page editorial said Beijing wants to settle its differences with the US, but warned that it will not change its system and can weather a lengthy stand-off.

"The US cannot control China, and it is even less likely that it can deter China's development," it said.

It warned the US not to miscalculate China’s strength, saying that Washington risks making “mistake after mistake”.

Trump has been demanding that China reduce the massive trade deficit which last year climbed to over 539 billion dollars. He is also pressing for verifiable measures for protection of intellectual property rights, technology transfer and more access to American goods to Chinese markets.

Chinese officials say while China is willing to import more and provide access to US goods, Beijing is finding it hard to agree for Trump's demand for intrusive inspections to enforce IPR which China failed to curb so far.

Trump has already increased the tariffs on over 250 billion dollars worth of Chinese exports to US and threatened to extend tariffs on 200 billion dollars worth of Chinese imports to 25 per cent. China too slapped reciprocal tariffs on some US exports to the country.

Meanwhile, the US markets plunged on Monday as China amid the escalating trade war. The Dow Jones industrial average fell more than 600 points, while a 3.4 percent drop in the tech sector pushed the S&P 500 down by 2.3 percent. The Nasdaq Composite dropped 3.2 percent.