The Latest: US markets hit as China retaliates with tariffs

The Latest on the tariffs battle between China and the United States (all times local):

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a.m.

The Dow is down 500 points after China announced retaliatory tariffs against the United States.

China said Monday that there will be tariff hikes on $60 billion of U.S. imports after the Trump administration on Friday raised tariffs on $200 billion in Chinese imports from 10%, to 25%.

The retaliatory measures were announced about an hour after President Donald Trump tweeted directly to Chinese President Xi Jinping saying: "China will be hurt very badly if you don't make a deal because companies will be forced to leave China for other countries."

The Dow and the S&P are down more than 2%. The tech heavy Nasdaq is down 2.5%

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9 p.m.

China has announced it is raising tariffs on $60 billion in U.S. goods in retaliation for the latest penalties on its exports announced by the Trump administration.

The Finance Ministry said Monday the penalty duties of 5% to 25% on hundreds of U.S. products including batteries, spinach and coffee take effect June 1.

That followed Trump's increase Friday of duties on $200 billion of Chinese imports from 10% to 25% in a dispute over Beijing's technology ambitions and trade surplus.

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1:58 p.m.

Companies are waiting to see how China will retaliate for President Donald Trump's latest tariff hikes on Chinese imports while economists warned the escalating dispute could slow growth.

Chinese officials gave no indication Monday what steps they might take after threatening "necessary countermeasures" for Trump's penalties on $200 billion of Chinese goods, imposed Friday.

Trade talks wrapped up later Friday in Washington without an agreement.

Jake Parker, the vice president of the U.S.-China Business Council, an industry group, said officials appeared to be studying the potential impact on China's economy before deciding how to respond.

Morgan Stanley economists said the tariff hike could trim China's annual economic growth by 0.5 percentage points. They said that impact could grow if uncertainty prompts companies to cut jobs or postpone investment.

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