"This practice of extreme pressure and blackmail" will be met with other comprehensive quantitative and qualitative measures, the country's Commerce Ministry warned.
In addition to the $200 billion of imports Trump threatened with tariffs if China hits back over duties already announced on $50 billion of exports to the United States, he said another $200 billion would be imposed if Beijing retaliates further, a high-risk strategy that drove shares and commodities lower.
In the first round of penalties announced by both nations, to take effect July 6, the US plans to impose tariffs of 25 per cent on $34 billion of Chinese imports, such as construction machinery, aerospace and power generation equipment. The benchmark index of Chinese stocks fell nearly 4 per cent, other Asian share markets declined and US equity futures traded lower, while safe havens including the yen, gold and Treasuries climbed.
US stocks fell on Tuesday and the Dow Jones Industrial Average turned negative for the year as a sharp escalation in U.S.
"It's kind of a lose-lose for both the people in China and the USA soybean industry, and the soybean farmer", said Bardole.
To escalate the trade war, China would have to turn to non-tariff measures. "At the president's direction, USTR is preparing the proposed tariffs to offset China's action". The total number of goods imported to the United States from China in 2017 amounted to around $505.6 billion. Higher prices on imported goods could dampen consumer sentiment and pressure inflation.
White House trade adviser Peter Navarro, who views China as a rival economic and military power, said Beijing had more to lose from a trade war.
"Asian countries that have close trade ties to China such as South Korea and Japan are bracing for side effect of the trade war", Park Jin-woo, researcher at Center for Trade Studies under Korea International Trade Association. It injected another 200 billion yuan (US$31 billion) into the economy via its medium-term lending facility on Tuesday, pushing its net injections so far in June to the most in any month since December 2016. The move would be the largest blow in the tit-for-tat tariff fight between the United States and China.
Trump issued a statement this evening noting that "unfortunately" China "apparently has no intention of changing its unfair practices related to the acquisition of American intellectual property and technology".
Two decades ago, China's economy was largely fuelled by exports, but it has made progress in rebalancing towards domestic investment and consumption since the global financial crisis erupted last decade - limiting the damage trade tariffs could inflict on Beijing.
Trump suggested he is not anxious that China will relax pressure on Pyongyang, despite the trade dispute. The Senate voted on Monday to attach a provision denying relief to ZTE to a must-pass defense funding bill.
President TrumpDonald John Trump20 weeks out from midterms, Dems and GOP brace for surprises Sessions responds to Nazi comparisons: "They were keeping the Jews from leaving" Kim Jong Un to visit Beijing this week MORE's trade adviser Peter Navarro says that he doesn't have any knowledge about conversations between Trump and Apple CEO Tim Cook on allegedly exempting the iPhone from future USA tariffs.
In response, Beijing confirmed during the weekend it would bring in tit-for-tat tariffs on $34 billion of U.S. imports next month.
"One thing that we've heard specifically from companies is that the Chinese government has been holding meetings with domestic private and state-owned enterprises where they talk about diversifying away from the procurement of USA products and services and shifting those contracts to European, Japanese or domestic Chinese companies", Parker said. China retaliated Friday afternoon and then on Monday causing more upheaval in the global markets.