US President Donald Trump has instructed officials to consider a further $100bn (£71.3bn) of tariffs against China, in an escalation of a tense trade stand-off.
These would be in addition to the $50bn worth of US tariffs already proposed on hundreds of Chinese imports.
The proposal comes after China retaliated to that by threatening tariffs on 106 key US products.
The tit-for-tat moves have unsettled global markets in recent weeks.
China’s Ministry of Commerce responded on Friday to Mr Trump’s latest announcement, saying it would take new measures if the US followed through with its latest round of tariffs – and repeated that while it did not want a trade war, it was not afraid of one.
“China and the US as two world powers should treat each other on a basis of equality and with respect,” said Foreign Minister Wang Yi. “By waving a big stick of trade sanctions against China, the US has picked a wrong target.”
Analysts have warned of the risk of a full-blown trade war for the global economy and the markets and believe ongoing behind-the-scenes negotiations between the two giants are crucial.
Market reaction in Asia on Friday suggested investors were relatively untroubled by the latest twist in the trade spat.
In China, Hong Kong’s Hang Seng was up 1.3% while Japan’s benchmark Nikkei 225 edged down in late trading.
Earlier this year, the US announced it would impose import taxes of 25% on steel and 10% on aluminium. The tariffs were to be wide-ranging and would include China.
China responded last month with retaliatory tariffs worth $3bn of its own against the US on a range of goods, including pork and wine. Beijing said the move was intended to safeguard its interests and balance losses caused by the new tariffs.
Then the US announced it was imposing some $50bn worth of tariffs on Chinese-made goods, blaming what it described as unfair Chinese intellectual property practices, such as those that pressured US companies to share technology with Chinese firms.
Mr Trump argues that because Beijing forces any US firms setting up shop in China to tie up with a Chinese company, US ideas are left open to theft and abuse.
Mr Trump reiterated in his statement on Thursday that China’s “illicit trade practices” had been ignored by Washington for years and had destroyed “thousands of American factories and millions of American jobs”.
The draft details of the $50bn to $60bn worth of tariffs were released last week when Washington set out about 1,300 Chinese products it intended to hit with tariffs set at 25%.
China responded this week by proposing retaliatory tariffs, also worth some $50bn, on 106 key US products, including soybeans, aircraft parts and orange juice. This set of tariffs was narrowly aimed at politically important sectors in the US, such as agriculture.
In Mr Trump’s Thursday statement he branded that retaliation by Beijing as “unfair”.
“Rather than remedy its misconduct, China has chosen to harm our farmers and manufacturers,” he said.
“In light of China’s unfair retaliation, I have instructed the USTR (United States Trade Representative) to consider whether $100bn of additional tariffs would be appropriate… and, if so, to identify the products upon which to impose such tariffs.”
He said he had also instructed agricultural officials to implement a plan to protect US farmers and agricultural interests.
On the political front, Mr Trump’s latest announcement has elicited a less-than-friendly reception from some fellow Republicans.
They have warned that the tariffs will hurt Americans and cost jobs. They have also said relationships the US has with its other big trading partners could be hurt.
US retail giants including Walmart and Target have also asked Mr Trump to consider carefully the impact the tariffs would have on consumer prices and American families.
On Thursday, Ben Sasse, a Republican Senator from the farming area of Nebraska, said Mr Trump’s latest plan was “nuts” and that he hoped the president was “just blowing off steam”.