BEIJING _ China on Monday announced tit-for-tat tariffs on $60 billion in U.S. goods as brinkmanship between the world's two largest economies undermined hopes for an end to a trade war that threatens the global economy.
Saying it would "never surrender" to outside pressure, China published a list of U.S. goods that would be hit by tariffs. The list on the Ministry of Finance website includes more than 5,000 items with tariffs of 5 percent to 25 percent covering a wide range of U.S. goods including agricultural products but also chemicals, metals and fabrics.
Stock markets worldwide fell significantly on the news. The Dow Jones industrial average was down about 2.5 percent by early afternoon.
Both sides have given themselves some room to continue negotiating a way out of the escalating trade conflict. The new Chinese tariffs don't take effect until June 1, and the higher tariffs that President Trump announced last week on Chinese goods also have a delayed effect.
Although those delays provide a potential offramp, neither side sounded in a hurry to take it.
"We have said many times that adding tariffs won't resolve any problem. China will never surrender to external pressure. We have the confidence and the ability to protect our lawful and legitimate rights," Chinese Foreign Ministry spokesman Geng Shuang said at a briefing.
A few hours before China announced its action, Trump warned in a tweet that "China should not retaliate_will only get worse!"
"I say openly to President Xi (Jinping) & all of my many friends in China that China will be hurt very badly if you don't make a deal because companies will be forced to leave China for other countries. Too expensive to buy in China. You had a great deal, almost completed, & you backed out!" he said in another tweet.
Beijing's new tariff action was expected after trade talks in Washington broke off Friday and the Trump administration went ahead and hiked taxes on $200 billion of imported Chinese goods to 25 percent from 10 percent.
Just a couple of weeks ago, businesses and investors were optimistic amid signs that a U.S.-China trade deal was close after multiple rounds of talks. But a dramatic hardening of positions on both sides in recent days has jolted markets and alarmed international leaders who are fearful of the effects of a full-blown trade war on the global economy.
Chinese state media blamed Washington for the crisis and argued that China's economy and political system were strong enough to outlast the U.S. in a battle of wills.
The editor of the Communist Party-owned Global Times, Hu Xijin, earlier tweeted that China's countermeasures would be carefully designed to ensure that its plan "hits the U.S. while minimizing damage to itself."
Trump has so far slapped 25 percent tariffs on a total of $250 billion of Chinese goods. He took his first action in June after his administration concluded that China has for many years been engaged in intellectual property theft and policies that coerce U.S. firms to hand over technologies in order to gain access to Chinese markets.
His next threatened step would be to impose 25 percent tariffs on all of the remaining Chinese merchandise that enters the U.S. _ roughly another $300 billion worth of goods. That would include many consumer products, including such high-profile imports as Apple iPhones, which are not subject to import taxes.
Since the trade fight began, China has imposed new or higher duties on $110 billion of American imports. Last year China imported about $156 billion of merchandise from the United States, according to China's customs data. (U.S. data put the figure at about $120 billion.)
The new Chinese tariffs would hit 5,140 American-made items with duties from 5 percent and 25 percent, with nearly half of them at 25 percent. The list includes nuts, legumes, honey, meat and wine and well as chemicals, cosmetics, tires, timber, fabrics, gems, steel and other metals.
The Ministry of Finance statement said the tariffs were "a response to unilateralism and trade protectionism."
"China hopes that the United States will return to the right track of bilateral trade negotiations, work together with China and meet China halfway to reach a mutually beneficial, win-win agreement on the basis of mutual respect and equality," the Finance Ministry statement said.
China's state media, which had been restrained during much of the trade conflict with the United States, lashed out at the Trump administration and voiced its determination to prevail. An opinion piece in the People's Daily condemned Washington's "reckless leap into the dark" and said China would never compromise on matters of principle.
"The U.S. wielded the tariff stick once again because it misjudged China's strength, capability and will power. By further escalating the trade tensions, does it really want to push its trade ties with China to breaking point?" read a piece under the byline Zhong Sheng, a pen name often used by the daily to express its opinions on foreign policy.
A Global Times editorial said Washington's "fierce offensive" would hurt America more than China.
"Washington obviously hopes that the fierce tariff war, which is unprecedented in trade history, will crush China's will in one fell swoop and force China to accept an unequal deal in a short term," said the newspaper owned by the Chinese Communist Party.
"However, once the country is strategically coerced, nothing is unbearable for China in order to safeguard its sovereignty and dignity as well as the long-term development rights of the Chinese people."
At the heart of the trade issue are Washington's complaints that China failed to live up to commitments it made to open up the nation's economy to foreign companies when it joined the World Trade Organization in 2001. The U.S. complains that China has blocked market access to key areas of its economy, forced foreign companies to surrender trade secrets and subsidized state-owned companies in strategic technology sectors, giving them an unfair trade advantage.
The confrontation between the two sides has escalated after both sides hardened their approach to negotiations last week. Trump increased tariffs after accusing Beijing of reneging on commitments negotiated in recent months.
U.S. officials say China walked back an agreement that it would enact changes to its laws as part of the deal. Chinese Vice Premier Liu He, Xi's chief negotiator, has not explicitly denied the U.S. allegation, saying instead that it's normal to have ups and downs in negotiations.
Washington negotiators led by U.S. Trade Representative Robert Lighthizer have been insisting that Beijing agree to enforcement mechanisms on any deal. Washington has long complained that China's negotiating strategy has involved keeping commitments as vague as possible.
After talks ended Friday without agreement, Liu publicly spelled out his country's demands in comments to Chinese media: All additional tariffs must be lifted; demands that China buy more from the U.S. should be realistic; and a final deal should be "balanced."
"We believe that these things are major issues of principle. So every country has important principles, and we absolutely cannot make concessions on such issues," Liu said.
Although the U.S. presidential election is 18 months away, the political space for compromise with Beijing appears to be shrinking fast, with Trump unwilling to look weak on China.
Meanwhile, Xi is also unwilling to look as if he has been bullied into a deal by Trump.
Robert Z. Lawrence, senior fellow with the Peterson Institute for International Economics in Washington, argues that China may have miscalculated, believing that Trump needed a deal for political reasons in the lead-up to elections. Instead, he said, Trump saw Friday's tariffs hike as delivering on a long-held promise.
"This is one of the few things that Donald Trump has had the intention of (doing) _ imposing 25 percent tariffs on China, and that is what he is achieving. So he likes the tariffs. He's very enthusiastic about these tariffs," said Lawrence, who is in Beijing with other members of the institute.
Adam S. Posen, the institute's president, said Trump appeared to be convinced that at some point China would cave in.
"Other senior officials generally believe that either way they win. If they get a deal with Lighthizer's requests, they will have achieved something. If China walks away, then they get to say to the rest of the world, 'They're resistant to reform,'" said Posen.
The sharpening trade war may hit China's recovery after growth slowed, particularly in manufacturing, in the last quarter of last year. China responded with a hefty stimulus but the new tariffs are putting businesses in the U.S. and China under pressure.
(Dixon reported from Beijing and Lee from Washington. Gaochao Zhang of The Times' Beijing Bureau contributed to this story.)
