Global stock markets tumble after China announces retaliatory tariffs

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China announced it would hit the U.S. with tariffs of $60bn on $200bn worth of goods starting on June 1.

U.S. President Donald Trump, U.S. Secretary of State Mike Pompeo, U.S. President Donald Trump's national security adviser John Bolton and Chinese President Xi Jinping attend a working dinner after the G20 leaders summit in Buenos Aires, Argentina December 1, 2018.

The announcement came after the latest round of US-China trade negotiations ended Friday without a deal, and after Washington increased tariffs on $200 billion worth of Chinese products. "He claimed that it had been "proven recently" that out of the 25 percent increase, "only 4 points were paid by the U.S." while "21 points" were paid by China".

Wei Jianguo, a former vice-minister at the Ministry of Commerce who handled foreign trade, told the South China Morning Post that China was prepared for a long trade war.

Last July, Trump began gradually slapping tariffs on Chinese imports. On Monday, he Tweeted, that consumers could avoid the effects of tariffs by buying goods from a "non-tariffed" country.

President Donald Trump's trade war with China has taken a toll on the US stock market.

He also said there would be "nobody left in China to do business with" and suggested the situation would only get worse for their economy.

"I think that China felt they were being beaten so badly in the recent negotiation that they may as well wait around for the next election, 2020, to see if they could get lucky & have a Democrat win - in which case they would continue to rip-off the United States of America for $500 Billion a year", he tweeted. The higher Chinese tariffs don't kick in until June 1. Beijing has balked at USA demands that it use its legislative process to enshrine changes in law, saying it can use other state directives to accomplish its aims.

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Though the Chinese tariffs are more limited in scope, they have been more carefully calibrated to reduce ill effects on China, said Mei Xinyu, a researcher with the Chinese Academy of International Trade and Economic Co-operation, a research body under the Ministry of Commerce. That list was issued in response to Trump's threat to raise tariffs on $200 billion of Chinese goods to 25% from 10%.

And as a result, US soybean exports to China plummeted from August to January.

Scott Lincicome, an worldwide trade attorney who works for the libertarian CATO Institute, said that this analysis was based on a "hypothetical" examination, and that "2 rigorous academic examinations" had shown that the cost of these tariffs rested with American consumers.

The prospect that the United States and China were spiraling into a no-holds-barred dispute that could derail the global economy has rattled investors and led to a sharp selloff on equities markets in the past week.

"We not expect China to sell US Treasuries", ING said.

Still, the two countries have given themselves something of an escape hatch: The higher Chinese tariffs don't kick in for 2 1/2 weeks.

US Secretary of State Mike Pompeo is expected to meet Putin and Russian Foreign Minister Sergey Lavrov on Tuesday in Sochi for the highest-level talks between Moscow and Washington in almost a year.