China has announced that it will impose higher tariffs on $60 billion of US goods starting on June 1, further escalating the ongoing trade war between the two countries. This decision came just three days after the United States more than doubled tariffs on $200 billion of Chinese imports. The tit-for-tat behavior has roiled stock markets, with Asian markets falling after Wall Street experienced sharp losses.
US President Donald Trump had cautioned China against raising tariffs, but Beijing retorted, saying it would not accept any “bitter fruit” that damaged its interests. The affected products include beef, lamb, pork, vegetables, fruit juice, cooking oil, tea, and coffee. The latest round of trade negotiations between the US and China ended without a deal, and the US is also considering raising tariffs on essentially all remaining Chinese imports, potentially valued at around $300 billion.
Despite the failure to reach a deal, President Trump stated that the US has a good relationship with China and expressed hopes for constructive talks at the G20 summit in Japan in late June. However, his approach to the dispute has led to division even within his administration, with economic adviser Larry Kudlow warning that “both sides will suffer.” The tensions have cast a cloud of uncertainty over the global economy, causing apprehensive ripple effects across financial markets worldwide.