Financial markets were hit with heavy selling Friday as China announced new tariffs on U.S. goods. China said it would impose new tariffs of $75 billion on U.S. imports, including a 25% levy on U.S. autos. CNBC created an infographic showing exactly which sectors were due to be hit the hardest in the new round of tariffs. The largest category of exports to be subjected to the new tariffs is electronics, which includes cellphones and semiconductors. Next is machinery, including engines. Aircraft parts round out the top three. Following the announcement, shares of major American tech companies experienced heavy selling. Apple shares dropped 4.6%, Broadcom declined 5.4%, and Nvidia fell 5.3%. In the machinery category, shares of Caterpillar ended down 3.3%. A conundrum for China is that many of the items it will impose tariffs on are subsequently exported back to the US and elsewhere as components of finished products. So China could, in effect, hurt its own exports by its tariff on imports! The chart below, from CNBC.com, shows the categories of products affected by the new tariffs.
China's tariff targets
| August 26, 2019