China announces retaliatory tariffs on $60 billion in U.S. goods

May 13 (UPI) -- China announced Monday it will raise tariffs on $60 billion in U.S. goods in response to the Trump administration raising tariffs on $200 billion in Chinese products.

The Chinese Finance Ministry said it will increase tariffs from 10 percent to 25 percent on June 1. U.S. President Donald Trump's tariff increases started Friday after trade talks between the two countries broke down in Washington.

The tariffs will mostly affect the U.S. agricultural industry, with products such as peanuts, sugar, wheat, chicken and turkey. China said the tariffs will cover about 5,000 products, including honey, soda, gin, tequila, vodka, certain building materials, furniture, musical instruments, boats, electronics and fertilizer.

China's announcement sent the U.S. stock market plummeting, with the Dow Jones Industrial Average down 617 points or 2.4 percent as markets closed on Monday.

Chinese Vice Premier Liu He warned Friday that China would counter U.S. tariffs after high-level trade talks ended between the two countries. Liu said cooperation is needed but China would not compromise on its major principles.

Liu called for the United States to remove all additional tariffs as the starting point of further negotiations, that China's increase of purchases of U.S. goods should be "realistic," and wording of the agreement must be "balanced."

In a series of Twitter posts before China announced its new tariffs, Trump warned the country not to retaliate against his new tariffs.

"I say openly to President Xi [Jinping] & 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," Trump tweeted. "Too expensive to buy in China. You had a great deal, almost completed, & you backed out."

China's Global Times, which aligns itself with the country's Communist Party, said that Beijing also is considering ending its purchase of U.S. agricultural products and energy altogether while restricting U.S. service trade.