The move is expected to escalate tensions between the two nations that have been embroiled in a trade face-off for months now.
BBC reports that China has responded by accusing the US of “blackmail” and saying it would match any further tariffs. A statement by the Chinese commerce ministry said that if the USA “loses its senses and publishes such a list, China will have to take comprehensive quantitative and qualitative measures and retaliate forcefully”.
Trump insists that China has been unfairly benefitting from trade imbalance with the USA.
Last week, he announced the USA would impose 25% tariffs on $50bn worth of Chinese goods. Beijing responded by saying it would hit 659 US products worth $50bn – including agricultural products, cars and marine products – with a similar tax. In a statement Trump said that by retaliating, China was “threatening United States companies, workers, and farmers who have done nothing wrong”.
Asian markets sunk on Tuesday in response to the latest news. Stock markets had already fallen on Monday amid fears of a further deterioration in US-China trade relations. However, Bloomberg reports that yen, gold and Treasuries have climbed.
This deepening trade dispute has been described as one of the biggest risks to global growth, by the International Monetary Fund. By targeting goods that are finished in China but whose components are often sourced from neighboring South Korea, Japan and Taiwan and more, the American strategy could hurt the economies of its allies too.