China is raising tariffs on $60 billion of US goods starting June 1

China will raise tariffs on $60 billion in U.S. goods in retaliation for the U.S. decision to hike duties on Chinese goods.

Beijing will increase the tariffs to 25% from 10% on June 1, the Chinese Finance Ministry said Monday. It follows President Donald Trump‘s decision to raise duties on $200 billion in Chinese products to 25% from 10% as the world’s two largest economies struggle to ink a new trade deal. 

The action raises the stakes in a widening trade conflict that has rattled investors and threatened to damage the global economy. U.S. stock futures signaled a sharp drop Monday morning amid the escalation.

Soybean meal in a dockyard in Nantong in east China’s Jiangsu province, Aug. 06, 2018.

Feature China | Barcroft Media | Getty Images

The duties in large part target the U.S. agriculture industry, which has suffered from previous shots in the Trump administration’s trade war with China. The thousands of targeted products include peanuts, sugar, wheat, chicken and turkey. 

Neither the White House nor the Treasury Department immediately responded to CNBC’s requests to comment on the tariff increase. 

In increasing tariffs on Friday, the White House said China withdrew from major elements of a developing trade agreement. While Treasury Secretary Steven Mnuchin and U.S. Trade Representative Robert Lighthizer met with Chinese negotiators last week in talks Mnuchin called “constructive,” the sides could not strike a deal and have no more talks planned currently. 

Trump, who wants to address grievances such as intellectual property theft, forced technology transfers and trade deficits, pushed China to make a deal ahead of its retaliation on Monday morning. In a string of tweets, the president argued the tariffs are “very bad for China.” He said “China should not retaliate” as it “will only get worse!” 

“You had a great deal, almost completed, & you backed out!” he wrote of China and its President Xi Jinping. 

— CNBC’s Kevin Breuninger and Tucker Higgins contributed to this report

This is breaking news. Please check back for updates.

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