It has signalled it might target products manufactured in China that are critical to the supply chains of U.S. technology and manufacturing companies; products relatively low in value but not easily or readily available elsewhere.
The higher import taxes will apply to more than 5000 items, marking the biggest round of U.S. tariffs so far.
While there are measures China can take to retaliate, it is limited by the imbalance between its exports to the United States and its imports from the U.S., which amount to only about $US130 billion a year. The latest levies are set to go into effect September 24 and remain at 10 percent until the end of the year.
The trade tensions are rattling companies in a range of industries, but the technology giant's heavy dependence on the USA and China makes it especially vulnerable as the world's two-largest powers escalate their economic feud. "I think that kind of tactic is not going to work with China", Fang Xinghai, vice chairman of China's securities regulator, said at a conference in the port city of Tianjin. It will cost jobs and economic growth even though China is now far less reliant on exports than it once was.
"Further, if China takes retaliatory action against our farmers or other industries, we will immediately pursue phase three, which is tariffs on approximately $267 billion of additional imports", President Trump warned.
Last year, Southern California ports handled $173bn in Chinese imports, about a third of all goods shipped from China to the US, CNBC reported.
Chinese stock markets opened lower on Tuesday.
Officials in Beijing have already announced that they will retaliate against the USA if the new levies are imposed.
Yes, it has. In fact, this latest round marks the third set of tariffs put into motion so far this year.
In July, the White House increased charges on $34b worth of Chinese products.
Word of Trump's latest tariff plans has weighed on Wall Street since last week, with markets in a wait-and-see mode.
"This is clearly a further ratcheting up of the trade war and we are now getting close to a situation where you can nearly speak of a full-fledged trade war".
However, this latest round is the biggest to date, and unlike the earlier rounds this latest list targets consumer goods, such as luggage and furniture.
"If we're not right, we'll roll them back, " Trump is reported to have said.
They also say U.S. economic growth and inflation are likely to have peaked this year, which could help to further turn the tide of market sentiment against the Dollar over coming months.
Officials said they wanted to shield consumer goods from the taxes as much as possible. The final list released today removed 300 items that include smartwatches, bike helmets, children's playpens, some chemicals, and health and safety devices.
Smart watches, bluetooth devices removed from tariff list; bicycle helmets, baby auto seats, safety gear also excluded.
A group of tech companies including Cisco Systems Inc, Dell Technologies Inc, Hewlett-Packard Enterprise Co and Juniper Networks had asked that many of those items be dropped, but they remained on the list with only a few exceptions such as a group of networking-related accessories. Some companies are looking to move out of China to dodge the tariffs, said Ted Murphy, a partner at the Baker McKenzie law firm.
What is the United States doing?
China's Foreign Ministry said it welcomed the invitation, but Trump later raised questions about it, saying on Twitter that he was under no pressure to make a deal with Beijing and that the United States "will soon be taking in Billions in Tariffs & making products at home".
"For months, we have urged China to change these unfair practices, and give fair and reciprocal treatment to American companies".