China will hike tariffs on roughly $60 billion in U.S. imports, a retaliation against the Trump administration’s decision to increase duties on shipments of Chinese goods to America as the two nations continue discussions on a trade deal.
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Poised to affect over 5,000 U.S. products, the tariffs will range to as high as 25 percent, up from between 5 and 10 percent currently, and take effect on June 1.
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The U.S. stock market opened roughly 450 points down on Monday amid the trade tensions. Shares of companies with robust operations in China, including Boeing, Apple and Caterpillar, were also on the decline.
Earlier in the day, President Trump warned China against the retaliatory maneuver, tweeting that it "will only get worse!"
Ahead of the latest round of negotiations last week in Washington D.C., Trump said the U.S. would raise tariffs on an existing $200 billion in Chinese imports, from 10 percent to 25 percent. Those tariff increases took effect on Friday.
The White House is also starting work to impose tariffs on an additional $325 billion in shipments, effectively covering all trade from the Asian nation after China allegedly back-tracked on previously agreed upon terms for the trade deal.
While no additional negotiations are scheduled between the U.S. and China, White House officials expect them to continue.
"We don't think the Chinese have come far enough. We'll wait and see. The talks will continue. And I will say this -- there's a G-20 meeting in Japan toward the end of June, next month, and the chances that President Trump and President Xi will get together at that meeting are probably pretty good," top Trump economic advisor Larry Kudlow told FOX News on Sunday.
U.S. businesses large and small say they have been impacted by the ongoing tit-for-tat with China. Ford Motor Co., Caterpillar Inc. and others say the China duties, along with the steel and aluminum tariffs, have added millions of dollars in additional costs, while Main Street companies warn that the trade war is impacting their ability to hire new workers and raise capital.
The latest drama around the trade talks is leading some experts to sour on whether an agreement can ultimately be reached between the world's two largest economies.
"As we learn more about the issues that kept the US and China from making progress last week, we become less optimistic that they may finalize a deal," Morgan Stanley strategist Michael Zezas and chief economist Chetan Ahya wrote in a recent research note.
Among the remaining disputes between the U.S. and China is when the Trump administration will remove tariffs and whether China will be required to change its laws around the forced transfer of intellectual property.