China is to hit back at the US by raising tariffs on American goods from 84 per cent to 125 per cent, starting on Saturday, escalating trade tensions between the world's two biggest economies.
The move is in response to what Beijing calls "abnormally high tariffs [that] seriously violate international economic and trade rules, basic economic laws and common sense, and are completely unilateral bullying and coercion", China's Customs Tariff Commission of the State Council said in a statement on Friday.
Starting on Saturday, "the tariff increase measures on imported goods originating from the US will be adjusted", it said.
US President Donald Trump last week unveiled sweeping tariffs on goods from around the world and has hit China, its economic and political rival, with higher levies. On Wednesday, Mr Trump announced a 90-day pause on the tariffs for all countries except China, further angering Beijing.
The latest twist in the tariffs saga is likely to disrupt markets again, after they had largely stabilised this week.
"The escalating tensions between the two giants will likely send another selling wave to the markets before the closing bell, reminding investors that the trade war continues despite the 90-day pause for others boosting growth and inflation fears," Ipek Ozkardeskaya, a senior analyst at Swissquote Bank, told The National.
"We are not out of the woods yet. China won’t back down. They’ve got nothing to lose. It’s like watching gladiators fight a sanguine battle."
