China immediately retaliated with duties on the same value of USA goods, including soybeans and cars. President Xi Jinping, facing his own political pressures to look tough, has vowed to respond blow-for-blow.
The 200-page document, released on Tuesday by the US Trade Representative's office, gives notice to those who wish to comment on the proposal and lists hundreds of products that would be subjected to the new tariffs.
The Aussie, considered a liquid proxy for China-related trades, fell 0.5 percent against the dollar to $0.7422.
The International Monetary Fund has warned that a full-blown trade war could undermine the broadest global upswing in years.
"Don't start a trade war and throw the soybean farmer under the bus because some big business lobby in Washington is whining about China's terms of business", he said.
Unfortunately for markets, no end is in sight, with further retaliatory levies nearly certain to be enacted by China in the coming days or weeks.
Earlier the trade war jitters also rocked Asia. The move also was seen accelerating an existing trend to return some production to the USA and.
"The behaviour of the United States is hurting China, hurting the world, and hurting itself", a spokesperson for China's commerce ministry said in a statement.
'Tonight's announcement appears reckless and is not a targeted approach, ' Senate Finance Chairman Orrin Hatch said.
He added however that the move was still "a very sobering reality check as to just how fragile sentiment around trade war rhetoric is". The proposed list of goods includes consumer items such as clothing, television components and refrigerators as well as other high-tech items, but it omitted some high-profile products like mobile phones. The move has faced criticism from American officials and lawmakers. The Trump administration has so far rejected Chinese offers to trim its massive trade surplus by buying more American goods, and is demanding more systemic change.
"This type of irrational behavior is unpopular", the statement said, adding China would tack on the case to its suit against the U.S. at the WTO.
Fresh US tariffs would also come at a time when the Trump administration is seeking Beijing's help reining in North Korea's nuclear-weapons programme.
Members of Congress are increasingly questioning Trump's tactics.
Chinese-made teddy bears carrying American hit movie Avengers characters are displayed inside an arcade game at a shopping mall in Beijing, Wednesday, July 11, 2018.
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