Days after the Trump administration made good on their promise to raise Section 301 tariffs on Chinese imports, China's State Council Customs Tariff Commission announced new tariffs on $60 billion worth of U.S. goods. China's latest tariffs on 5,140 products will take effect on June 1, adding up to 25% to the cost of U.S. goods that are covered by the new policy.

China’s latest counter-strike was expected after the U.S. raised Section 301 tariffs on May 10. Speaking about the likelihood that China would retaliate with their own set of tariffs, President Trump's top economic adviser Larry Kudlow said, "I reckon they will. We'll see what they come up with."

President Donald Trump has threatened to escalate tariffs on Chinese goods from 10 percent to 25 percent in a series of tweets Sunday, May 5 and Monday, May 6. In response, the value of the yuan and crude oil fell, and the Dow Jones Industrial Average plunged 450 points triggered by a global selloff.

“Risks of a full-blown trade war are escalating,” said Chua Hak Bin, a senior economist at Maybank Kim Eng Research in Singapore. “Trump’s threat may backfire as China will not want to negotiate with a gun pointing at their heads.”

The Office of the United States Trade Representative (USTR) has announced additional retaliatory tariffs under Section 301 of the Trade Act of 1974 on European Union goods as a result of World Trade Organization (WTO) findings on EU Airbus subsidies. On April 8, the USTR released a preliminary list of EU products that are set to be subject to additional tariffs, pending arbitration at the WTO.

According to the statement, USTR estimates that the EU subsidies cost the U.S. $11 billion in trade per year. It identifies EU products to which additional duties may be applied until the EU removes those subsidies. The EU has challenged the claims put forth by USTR.  The results of the WTO settlement dispute are expected to be issued this summer.