China will raise tariffs on $60 billion in U.S. goods in retaliation for the U.S. decision to hike duties on Chinese goods, the Chinese Finance Ministry said Monday.
Beijing said it will increase tariffs on more than 5,000 products to as high as 25%. Duties on some other goods will increase to 20%. Those rates will rise from either 10% or 5% previously.
The move follows President Donald Trump’s decision to raise duties on $200 billion in Chinese products to 25% from 10%. The world’s two largest economies have struggled to sign a trade deal and end a widening conflict that threatens to damage the global economy.
The duties in large part target U.S. farmers, who openly supported Trump in 2016 but suffered from previous shots in the Trump administration’s trade war with China. The thousands of products include peanuts, sugar, wheat, chicken and turkey.
However, this harms not only the U.S. farming industry, but also the many e-commerce businesses sourcing goods from Chinese online wholesale vendors such as AliExpress, Alibaba and Wish. The trade war will definitely leave heavy consequences in the digital trading world, as most U.S. online shops purchase directly from Chinese vendors and then re-sell goods.
Neither the White House nor the Treasury Department immediately responded to requests to comment on the tariff increase.
The U.S. may not be done retaliating. Trump has threatened to put 25% tariffs on $325 billion in Chinese goods that remain untaxed. The president made it clear he is content leaving the duties in place, arguing they will damage China more than the U.S. This seems less likely given how the latest developments are unfolding.
The U.S. hopes to revive discussions as it tries to reach a deal. On Sunday, Kudlow said there is a “strong possibility” Trump will meet with Xi during the G-20 summit in Japan next month.
CNBC contributed to this report