China has announced it is raising tariffs on $60 billion in U.S. goods in retaliation for the latest levies on its exports announced.
The Chinese finance ministry said Monday that it, effective June 1, it will impose duties of 5% to 25% on hundreds of U.S. products including batteries, spinach and coffee.
According to Morgan Stanley economists, the tariff hike could trim China’s annual economic growth by 0.5 percentage points. That impact could grow if uncertainty prompts companies to cut jobs or postpone investment, they said.
Stocks dive as trade dispute flares
U.S.Monday, following a downdraft in global financial markets. The Dow dived 511 points, or nearly 2% with the broader S&P 500 and tech-heavy Nasdaq sinking more than 2%.
The dispute between the world’s two largest economies is likely to get worse before it gets better. Goldman Sachs analysts think the Trump administration will propose another volley of tariffs on more than $300 billion in Chinese imports. But they note the process to implement the measures would take roughly two months to complete, offering a window for U.S. and Chinese negotiators to conclude a trade deal.
“Trade talks between the U.S. and China are likely to continue, despite the resumption of tit-for-tat tariffs,” Freya Beamish, chief Asia economist for Pantheon Macroeconomics, said in a research note.