China hit back at the threat of new U.S. trade levies Friday by slapping fresh tariffs on $60 billion worth of American made goods in the latest, and most serious, escalation of tensions between Washington and Beijing.
China's Commerce Ministry said the new tariff charges would range between 5% and 25% and will be imposed immediately in order to "guard its interests" and keep the current trade spat from escalating. Items included on the list include soybean oil, peanut oil, coffee, wheat flour and spirits, as well as steel and iron ore products.
The Ministry said that "any unilateral threat or blackmail will only lead to intensification of conflicts and damage to the interests of all parties."
The new China tariff followed a threat earlier this week from U.S. President Donald Trump to apply a 25% levy on $200 billion worth of Chinese imports into the U.S., a figure which would take the total base of China imports under which new tariffs apply to around $250 billion. Trump has also said he's "ready to go to $500 billion."
Since those comments, made in an interview with CNBC, official data from China has shown consistent signs of a slowdown, with figures from the Caixin/Markit Services PMI index showing the weakness pace of growth in four months, as new orders slump to the lowest level in two and a half years.
China's offshore yuan, which trades more freely than the tightly-controlled onshore currency, hit a fresh 13-month low of 6.9050 in Asia trading following the release, a move that again suggests concern for capital flight from the world's second-largest economy. China stocks also extended declines, with the Shanghai Composite falling 0.77% into the close of the session while the bluechip CSI 300 was marked 1.42% to the downside.
That move was reversed late in the Asia session, however, when the People's Bank of China stepped in and slapped a 20% reserve requirement for companies trading yuan in the forward foreign exchange market.