All told, Trump is now threatening to penalize up to $450 billion of Chinese goods - a value representing about 90 per cent of Chinese imports past year.
China's commerce ministry reacted swiftly, saying: "If the USA acts irrationally and issues a list, China will have no choice but to take comprehensive measures of a corresponding number and quality and take strong, powerful countermeasures".
It gave no details.
The US leader warned that after the new measures are in place - on top of existing 25 per cent tariffs on US$50 billion in Chinese imports - tariffs on another US$200 billion of Chinese goods would go forward "if China increases its tariffs yet again". "The United States will no longer be taken advantage of on trade by China and other countries in the world".
Asian stock markets fell following Trump's announcement.
The Shanghai Composite Index dropped more than 3 percent to its lowest since July 2016, while Hong Kong's Hang Seng shed 2.8 percent. And it has launched an investigation into whether tariffs should be slapped on cars and light trucks entering the US using the same national security clause.
Fears of a trade war that could harm global growth spurred sales of the Chinese yuan, which fell to a five-month trough in the offshore market, as well as commodity-linked and emerging market currencies.
Trump said that the new tariff would go into effect if the Chinese government did not lower recently announced tariffs on U.S. goods and failed to address the theft of usa intellectual property by Chinese companies. "Again and again the US has been provoking a trade war".
"Our view is that these actions are necessary to defend this country and that they are ultimately bullish for corporate America, for the working men and women of America, and for the global trading system", said Peter Navarro, who heads the White House office of trade and manufacturing policy.
China bought American goods worth $153.9 billion past year, while exports to the United States totaled $429.8 billion, according to customs data.
Chinese regulators also have the option of broadening their retaliation by tying up American companies in tax or anti-monopoly investigations or by denying or revoking licenses.
U.S. President Donald Trump and China's President Xi Jinping arrive for a state dinner at the Great Hall of the People in Beijing, Nov. 9, 2017.
The ministry's description of a combination of "quantitative and quality measures" under consideration indicates that the trade war will enter a new stage, experts said.
Miffed by Pompeo's comments, China hit back saying that United States is making allegations to cover up its unilateral protectionist policies.
The Canadian dollar weakened to a one-year low of C$ 1.3237 overnight, before paring some of its losses, as investors anxious about Canada's trade feud with the United States.
Beijing has vowed to retaliate, accusing the United States of "extreme pressure and blackmailing", and financial markets have been hit hard by the escalating trade conflict. "When you think about the size of the border and the amount of trade there is across that border, that border probably has less smuggling than any border in the world", he says.
Beijing also drew up a second list of $16 billion in chemical and energy products to hit with new tariffs, though it did not announce a date for imposing them.
President Donald Trump had announced a 25% tariff on up to 50 billion dollars (£37 billion) in Chinese imports. Last week, the US levied tariffs of 25 percent on $50 billion of Chinese goods.
Clayton Allen of Height Capital Markets said in a report Trump's "provocative" moves were aimed at winning quick Chinese concessions. He said China was taking intellectual property at a level never before seen.