Trade War Tightens: China Retaliates with 25% Tariffs of its Own

Deepening its trade war with the U.S. and sending world financial markets into a slide, China announced higher tariffs Monday on $60 billion worth of American goods in retaliation for President Donald Trump's latest penalties on Chinese products.

The Finance Ministry in Beijing announced tariffs of 5% to 25% will take effect on June 1 on about 5,200 American products, including batteries, spinach and coffee.

Monday's announcement followed a move by the U.S. on Friday to raise duties on $200 billion of Chinese imports to 25%, up from 10%. American officials accused China of backtracking on commitments it made in earlier negotiations.

With investors keying on the potential for economic damage on all sides, stocks sank across the globe. The Dow Jones industrial average was down more than 600 points, or close to 2.5% in mid-afternoon trading, while the Standard & Poor's 500 also sank nearly 2.5. In Canada, the S&P TSX index came off its lows of the day, but still trailed Friday's close by 0.7%. Earlier, stocks fell in Europe and Asia.

Two days of trade negotiations between U.S. and Chinese representatives broke up Friday without any agreement. Both countries have indicated more talks are likely.

Top White House economic adviser Larry Kudlow said on Sunday that China has invited U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin to Beijing. But nothing has been scheduled. Kudlow also said that Trump and Chinese President Xi Jinping may meet in late June at the G-20 summit in Japan