China issued a $50 billion list of more than 100 US goods including soybeans and aircraft targeted for a possible 25 percent tariff hike.
President Donald Trump's top economic adviser, Larry Kudlow, suggested the USA tariffs won't be implemented if China lowers barriers to trade. It is imposing tariffs of 25 percent on over 100 types of United States products, including soybeans, cars, alcohol and tobacco.
Economists say the back-and-forth does not amount to a full-blown trade war yet, but the risks are rising. Late on Tuesday, the Trump administration announced 25% tariffs on $50bn of annual imports from China, covering about 1,300 industrial technology, transport and medical products.
Publication of Washington's list starts a public comment and consultation period expected to last around two months.
This suggests, that the Trump administration is aware of the potential damage a trade war could have on the US economy and is keen not to harm economic growth. Last month, Trump tweeted that "trade wars are good, and easy to win".
As Trump said, the USA tariffs came after an investigation into the theft of United States intellectual property by China. But they're sending a clear message that they won't hesitate to take further and more punishing action - against US farmers in particular - if the president sets in stone the triggers to impose Section 301 tariffs as he has repeatedly said he wants to do. They're among 106 products ranging from aircraft to chemicals targeted by Beijing in retaliation against proposed American duties on its high-tech goods.
Cui Tiankai, Chinese Ambassador to the US, said if another round of tariffs or similar action is taken by Trump on intellectual property then China "will certainly take countermeasures of the same proportion and the same scale, same intensity".
Wang said the plan, which sets specific targets for domestic brands' share of some markets, should be seen as a guide rather than mandatory.
As of 11 a.m., the Dow Jones Industrial Average remained down 237 points to 23,796, the Nasdaq slid 50 points to 6,891, and the S&P 500 lost 16 points to 2,958. Wall Street was poised for big losses at the open with Dow futures and the broader S&P 500 futures 1.4 percent lower.
Beijing is hiking up tariffs on more than 128 US imports, including fruit and pork, as part of a tit-for-tat response to US President Donald 's $60 billion package of tariffs imposed against.
Oil prices slipped with Brent crude futures off 75 cents to $67.38 a barrel, while USA crude fell 73 cents to $62.78 a barrel. The duties are in retaliation for US plans to raise duties on a similar amount of Chinese goods.
The U.S. companies most at risk include Boeing, which previous year sold one-fourth of its commercial airplanes to China, and several auto makers.
When Donald Trump spoke at the World Economic Forum in Davos two months ago, he fleshed out a new doctrine for US economic trade with the rest of the world.
"What's next is we're going to see a tit-for-tat retaliation", says Joseph Brusuelas, chief U.S. economist at RSM, a global accounting and consulting firm.