Just the Start of the Trade War: China Raises Tariffs on $60 Billion of US Goods

In retaliation, China has increased tariffs on $60 billion of U.S. goods.

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After the U.S. increased tariffs on Chinese goods by 25 percent on Friday, the country has responded by raising tariffs on $60 billion U.S. goods. The increase on more than 5,000 products will be as high as 25 percent, while duties on some goods will increase to 20 percent, rising from either 10 or 5 percent previously. 

The countries have raised duties on each other as they continue to struggle negotiating a trade deal. 

China's announcement rattled U.S. investors, as stock indexes opened 2 percent lower on Monday and the dow dropped 400 points.

The White House claims that Beijing back out of major parts of a developing trade agreement, CNBC reports. While talks have continued to be constructive, both sides could not strike a deal. 

Donald Trump took to Twitter saying that tariffs are "very bad for China" and that it will "only get worse" if the country continues to retaliate. 

This is only the start of the global trade war. Trump has threatened to place a 25 percent tariff on the remaining $325 billion in Chinese goods that remain untaxed. 

While the Trump administration claims that China absorbs the costs from tariffs, the burden actually falls on many U.S. businesses and consumers, as previously reported by SDCE

U.S. businesses have been severely disrupted by the tit-for-tat tariffs as some companies have absorbed costs or reduced jobs. Now, the increase will impact businesses as they will have to pass the cost down to the consumers in order to stay afloat. 

The tariffs will take a bite out of the U.S. economy as well. The 25 percent tariffs on Chinese goods will cost the U.S. 2.1 million jobs and the average family of four more than $2,000 each year. 

However, the Trump administration hopes to revive discussions of a deal during the G20 summit in Japan in June.