China will retaliate with tariffs on $75 billion more of US goods and resume auto tariffs

China said Friday it will impose new tariffs on $75 billion worth of U.S. goods and resume duties on American autos.

The Chinese State Council said it decided to slap tariffs ranging from 5% to 10% on $75 billion U.S. goods in two batches effective on Sep. 1 and Dec. 15.

It also said a 25% tariff will be imposed on U.S. cars and a 5% on auto parts and components, which will go into effect on Dec.15. China had paused these tariffs in April.

Stock futures tumbled following the announcement.

The retaliatory tariffs came after President Donald Trump earlier this month surprisingly ended the cease-fire by threatening to impose 10% tariffs on another $300 billion of Chinese goods. Some of those tariffs have been delayed to December to avoid any impact on holiday shopping season and some items were outright removed from the list.

“In response to the measures by the U.S., China was forced to take countermeasures,” the Council said in a statement on Friday.

“The Chinese side hopes that the U.S. will continue to follow the consensus of the Osaka meeting, return to the correct track of consultation and resolve differences, and work hard with China to end the goal of ending economic and trade frictions,” it added.

The two sides are scheduled to hold trade talks early next month in Washington after their discussions in Shanghai in July.

The trade battle between the world’s two largest economies has dragged on for more than a year and a half. Chinese purchases of U.S. agricultural products remains a big sticking point in the trade conflict, which Trump claimed China didn’t follow through on its promise to order in large quantities.

White House trade advisor Peter Navarro said last week there are still many “structural issues” the U.S. needs to settle with China before they can reach a deal. These issues include cyber intrusion into U.S. business networks, forced technology transfer, intellectual property theft and currency manipulation, he said.

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