As U.S. hikes tariffs on Chinese goods, China is going to strike back

The President of U.S. Donald Trump’s tariff increase to 25% on $200 billion worth of Chinese goods took effect last Friday, and Beijing said it would strike back, ratcheting up tensions as the two sides pursue last-ditch talks to try salvaging the trade deal.

China’s Commerce Ministry said it deeply regrets the U.S. administration’s decision and that it would take necessary countermeasures, not expressly specifying.

The hike comes in the middle of the two-day negotiation between the U.S. and China in order to rescue the deal and end the 10-month trade war between the world’s two largest economies.

The Vice Premier of China Liu He, The U.S. Trade Representative Robert Lighthizer and The U.S. Treasury Secretary Steven Mnuchin talked for 90 minutes on Thursday and were expected to resume talks on Friday.

The Commerce Ministry said that negotiations were continuing, and it hopes the United States can meet China halfway, making joint efforts, and resolving the issue through cooperation and consultation.

Meanwhile, The U.S. Customs and Border Protection imposed the new 25% duty on affected the U.S.-bound cargoes leaving China after 12:01 a.m. EDT (0401 GMT) on Friday.

E-mini futures for U.S. S&P500 slipped, last down 0.5% in volatile trade. MSCI’s broadest index of Asia-Pacific shares outside Japan was more than 1% lower.

Michael Taylor, the managing director, and chief credit officer for Asia-Pacific at Moody’s Investors Service, said: «The higher tariffs could also lead globally to the repricing of risk assets, tighter financing conditions, and slower growth».