China is implementing new tariffs on meat, fruit and other products from the U.S. as retaliation for American duties, heightening fears of a potential trade war between the world's two largest economies.
Beijing's latest move, announced by its finance ministry in a statement dated April 1, is direct retaliation against taxes approved by President Donald Trump on imported steel and aluminum. Chinese officials had been warning over the last few weeks that their country would take action against the U.S.
The tariffs begin on Monday, the finance ministry statement said.
China's Customs Tariff Commission is increasing the tariff rate on pork products and aluminum scrap by 25 percent. It's also imposing a new 15 percent tariff on 120 other imported U.S. commodities, from almonds to apples and berries.
All told, the extra tariffs will hit 128 kinds of U.S. products, multiple outlets reported. The list of new duties matches the proposed list released by the government on March 23, according to Reuters.
At that time, China said the affected U.S. goods had an import value of $3 billion in 2017 and included wine, fresh fruit, dried fruit and nuts, steel pipes, modified ethanol and ginseng.
The decision to target $3 billion in U.S. imports is significant, but it's widely seen as a drop in the ocean given the size of the bilateral trading relationship. U.S. goods exported to China in 2016 totaled $115.6 billion, according to official data.
China's retaliation is "a statement of intent ... but it's not an escalation in our opinion," Steve Brice, chief investment strategist at Standard Chartered Private Bank, told CNBC on Monday.
The White House didn't respond to a message from The Associated Press on Sunday seeking comment.
While China's response was tied to Trump's steel and aluminum tariffs, it could end up hurting American ranchers and farmers — many of whom are from regions that voted for Trump in 2016. U.S. farmers shipped nearly $20 billion of goods to China in 2017. The American pork industry sent $1.1 billion in products, making China the No. 3 market for U.S. pork.
Of note, China's trade retaliation is not against Trump's announcement in March that he is planning new tariffs on up to $60 billion in Chinese imports.
The White House's planned tariffs are partly aimed at punishing Beijing for allegedly stealing American technology and pressuring U.S. companies to hand it over. Observers have suggested that Beijing may be saving stronger retaliatory measures for a response to that White House plan.
For Chinese tariffs to have a significant effect, "the U.S. should not be the main producer of that specific product, so China can easily find substitutes when trying to import that product," economists at Natixis said in a note.
Beijing could also ramp up its response by adding more goods to the 128-strong list.
"If China can tolerate a large price shock, stemming from the lack of other sourcing countries, or if the domestic market can to some extent be a buffer, it may also extend its measures to a wider set of sectors, such as sub-products in paper, photographic films and cereal," the Natixis note said.
But "more relevant products in terms of value of U.S. exports can hardly be included if China wants to achieve its Manufacturing 2025 targets," it continued, referring to a 30-year plan to boost China's industrial base.
Regardless, many fear escalating trade tensions between Beijing and Washington could damage the global economy.
For one, Nobel Prize-winning economist Robert Shiller said, following China's first threat of tariffs on 128 products, that uncertainty about tit-for-tat trade measures could result in an "economic crisis."
"It's just chaos: It will slow down development in the future if people think that this kind of thing is likely," he told CNBC.
Beijing has urged Washington to resolve the matter through dialogue and negotiation.
—The Associated Press contributed to this report.