After US targets China, Beijing hits back with proposed tariffsLast updated on Mar 23, 2018, 10:54 am
Hitting back at the US' trade tariffs, China has proposed similar action on 128 US products, which had an import value of $3bn last year.
The list includes items like wine, fresh fruit, pork and recycled aluminium goods.
Beijing has urged Washington to negotiate a settlement before it moves to implement the tariffs, but it hasn't issued a deadline.
The beginning of a likely global trade war
Earlier this month, US president Donald Trump announced steep 25% tariffs on imported steel and 10% on aluminum imports.
The decision came as the struggling domestic market was facing a "national security threat," they said.
This drew sharp criticism from the World Trade Organization and the International Monetary Fund.
EU trade chiefs mulled slapping a 25% tax on select imports from the US.
US targets Chinese imports worth up to $60bn
But the trigger for China's actions came yesterday, when Trump signed an executive memorandum to impose tariffs on Chinese imports worth up to $60bn.
"This is the first of many" trade actions, he warned.
The administration said it would issue a list of targeted products in 15 days, which would likely include high-tech products, aeronautics, new-energy vehicles and modern rail.
As Trump trains guns on China, EU gets relief
Meanwhile, the same day, the US said it will exempt the EU, Australia, Brazil, Argentina and South Korea temporarily from steel and aluminium tariffs.
Mexico and Canada had been granted exemptions before.
This prevented a potential loss of at least $2.4bn for the EU, one of the largest sources of US steel imports, compared to $400mn for China.
Here's what China is targeting now
China has now proposed tariffs of upto 25% on steel pipes, cars, ginseng, modified ethanol, airplanes, soybeans and cotton goods imported from US.
An editorial in the Global Times meanwhile warned of a "people's war."
However, China's imports from US are expected to hit $172bn in 2018, so the proposed tariffs worth $3bn won't cause a big loss to them, economist Tony Nash said.
US, Asian markets hit hard after announcements
The effects on both markets have been similar. In the US, the Dow Jones industrial average fell 724 points after Trump's announcement yesterday.
Today, Asian markets followed suit: Tokyo's Nikkei dropped almost 4% at 1:15am GMT.
In Australia, the largest iron ore exporter to China, the ASX200 benchmark index was down by 1.8%.
Hong Kong and Shanghai's shares fell more than 3%. In Seoul, Kospi was down 2%.