China to impose tariffs on US goods despite Trump warning

China’s finance ministry said on Monday it plans to set higher import tariffs ranging from 5 percent to 25 percent on more than 5,000 US products on a target list worth about $60 billion.

China said the tariffs will take effect on June 1.

The announcement came less than two hours after Trump warned Beijing not to retaliate after China said it “will never surrender to external pressure.”

The White House and US Trade Representative’s office did not immediately return a request for comment.

Related: Trump says trade wars are ‘easy to win.’ (They’re not.)

Global equities fell sharply on Monday as hopes of an imminent trade deal between the world’s two largest economies were crushed. Major US stock index futures were down about 2 percent.

The trade war escalated on Friday after Trump hiked tariffs on $200 billion worth of Chinese goods, saying China had reneged on earlier commitments made during months of trade negotiations.

Beijing had vowed to respond to the latest US tariffs. “As for the details, please continue to pay attention. Copying a US expression — wait and see,” Foreign Ministry spokesman Geng Shuang told a daily news briefing on Monday.

Trump warned China not to intensify the trade dispute and urged its leaders, including President Xi Jinping, to continue to work to reach a deal. “China should not retaliate-will only get worse,” he said on Twitter.

“I say openly to President Xi & 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 wrote.

Stead drum beat

Trump last week also ordered US Trade Representative Robert Lighthizer to begin imposing tariffs on all remaining imports from China, a move that would affect an additional $300 billion worth of goods.

Asked about the threat, Geng said: “We have said many times that adding tariffs won’t resolve any problem … We have the confidence and the ability to protect our lawful and legitimate rights.”

Chinese state media kept up a steady drum beat of strongly worded commentary on Monday, reiterating that China’s door to talks was always open, but vowing to defend the country’s interests and dignity.

In a commentary, state television said the effect on the Chinese economy from the US tariffs was “totally controllable.”

“It’s no big deal. China is bound to turn crisis to opportunity and use this to test its abilities, to make the country even stronger.”

Related: Who’s paying for Trump’s tariffs? China, or American shoppers?

Before high-level talks last week in Washington, China tried to delete commitments from a draft agreement that Chinese laws would be changed to enact new policies on issues from intellectual property protection to forced technology transfers. That dealt a major setback to negotiations.

Trump has since defended the US tariff hike and said he was in “absolutely no rush” to finalize a deal.

Top White House economic adviser Larry Kudlow said on Sunday there was a “strong possibility” Trump will meet China’s Xi at a G20 summit in Japan in late June.

By Makini Brice and Ben Blanchard/Reuters

Reporting by Ben Blanchard; Additional reporting by Makini Brice in Washington; Writing by Michael Martina; Editing by Darren Schuettler, Jeffrey Benkoe and Paul Simao.