Beijing will increase the tariffs to 25 per cent from 10 per cent on June 1, the Chinese Finance Ministry was cited as saying by CNBC.
The move follows US President Donald Trump’s decision to raise duties on $200 billion of Chinese products from 10 per cent to 25 per cent as the world’s two largest economies struggle to ink a new trade deal.
“China should not retaliate – will only get worse!” the US President tweeted shortly before news of the Chinese decision came.
The development raises the stakes in a widening trade conflict that has rattled investors and threatened to damage the global economy. US stock futures signalled a sharp drop on Monday morning amid the escalation.
Donald Trump on Monday warned his Chinese counterpart Xi Jinping that his country would be “hurt very badly” if a deal to end the year-long trade war between Washington and Beijing is not reached.
His comments came after the US raised tariffs from 10 per cent to 25 per cent on $200 billion worth of Chinese imports on Friday after a breakdown of negotiations, in a sharp escalation of their trade war.