"That changes the equation". An announcement on the tariffs is expected as early as Friday.
If the USA adopted the new trade measures, it would mean the country will have placed tariffs on $517 billion worth of Chinese goods, the entire value of all Chinese imports into the United States.
US stocks turned lower, with the Dow Jones Industrial Average falling sharpest as multinationals from Boeing to United Technologies and 3M retreated.
US President Donald Trump said he's ready to impose tariffs on an additional $267 billion in Chinese goods on short notice, on top of a proposed $200 billion that his administration is putting the final touches on.
In Beijing, China's Commerce Ministry said Thursday it was ready to retaliate.
He added that the $200 billion will "take place very soon, depending on what happens".
The Trump administration is poised to impose 25% penalties this week on $200 billion of Chinese goods in an escalation of their fight over USA complaints that Beijing steals or pressures companies to hand over technology.
Previous talks between Washington and Beijing did not result in an agreement, and it seems the trade war is likely to escalate further at least until the November mid-term elections. "If the USA ignores the opposition of these companies, acts arbitrarily and imposes any new tariffs, China will have to take countermeasures".
Most comments were from companies seeking to remove products from the tariff list, arguing there were few, if any alternative sources and the duties would cause financial hardship.
Companies such as Cisco and Hewlett-Packard say tariffs on Chinese networking equipment will ultimately make it more expensive for American consumers to access the Internet.
Kudlow, who heads the National Economic Council, told CNBC the administration was still talking with China about trade issues but so far China had not met U.S. requests. Among the equipment hit were a number of components and devices used by U.S. tech firms, including chips and networking gear produced in Chinese factories.
Specifically, Kudlow said, the United States was seeking "zero tariffs, zero non-tariff barriers, zero subsidies, stop the IP theft, stop the technology transfer, allow Americans to own their own companies".
"We are confident, capable and able to maintain steady and healthy development of the Chinese economy", Gao said.