China is pushing back against the United States in the trade war, despite President Donald Trump warning them not to retaliate.

On May 13, the Chinese regime announced its plans to raise tariffs on $60 billion US goods from a range of 5 to 25 percent. The tariffs will affect about 5,000 U.S. products starting 1st June.

This announcement came in response to the United States increasing tariffs from 10 to 25 percent on $200 billion worth of Chinese-manufactured goods on Friday.

Global equities fell sharply after hopes of an imminent trade deal between the world's two largest economies were dashed. Major U.S. stock indices also fell more than 2 percent by midday.

Last week Trump also ordered U.S. Trade Representative Robert Lighthizer to impose tariffs on all remaining imports from China. This would affect $300 billion worth of additional goods.

Before trade talks last week, China tried to delete commitments from a draft agreement with the U.S. --- commitments to change Chinese laws on a range of issues, from intellectual property protection to forced technology transfers. This withdrawal was a major blow to negotiations.

Trump wrote on twitter today, “China will be hurt very badly if you don’t make a deal because companies will be forced to leave China for other countries. Too expensive to buy in China. You had a great deal, almost completed, & you backed out!”

U.S. tech giant Apple is just one among other tech manufacturers already making plans to move production away from China, to locations such as Vietnam, Malaysia, and the Philippines.

Businesses from Hong Kong and Taiwan are also planning to pull some of their production away from China to avoid the added costs related to the proposed increased tariffs.

Taiwan’s Ministry of Economic Affairs launched a “welcome back” program in January to provide Taiwanese companies with incentives to come back. They can expect free rent for the first two years, favorable bank loans, and tax consultations.

Trump warned China not to intensify the trade dispute and urged its leaders to continue to work to reach a deal.


Top White House economic adviser Larry Kudlow said yesterday there was a strong possibility Trump will meet China's Xi Jinping at a G20 summit in Japan in late June.


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