Investors around the world were waiting to see how China would respond to the new US tariffs put into place last week, and Monday morning brought the answer: Beijing will raise tariffs on about $60 billion worth of imports from the US, reports the Wall Street Journal. The move came shortly after President Trump warned China in a tweet that retaliation would only make things worse for Beijing. It also came just ahead of the open for US markets, and things have since gone from bad to worse: The Dow was down more than 460 points in the opening minutes, or about 1.8%, and the S&P and Nasdaq were down similarly, per MarketWatch. Just before 1:30pm EDT, the Dow had plummeted further, and was down more than 700 points, or about 2.7%.
China will raise tariffs as much as 25% on about 5,000 products starting June 1, reports CNBC. The total figure is less than the $200 billion worth of goods affected by the new US tariffs. "Over the past week, hopes for at least a partial and temporary ceasefire between the two sides have given way to the prospect of a rapidly escalating and broadening economic conflict between the two countries," a professor of trade policy at Cornell University tells the Washington Post. In one of his tweets Monday, Trump addressed the impasse: "I say openly to President Xi & all of my many friends in China that China will be hurt very badly if you don't make a deal because companies will be forced to leave China for other countries," he wrote. "Too expensive to buy in China. You had a great deal, almost completed, & you backed out!" (Read more US-China relations stories.)