‘Totally unacceptable’: Beijing vows retaliation if U.S. taxes $200bn of Chinese goods

Broker takes order beside her colleague during afternoon trading at a brokerage in Hong Kong

"We have been very clear and detailed regarding the specific changes China should undertake".

But China has rebuffed US complaints and denied any harm was done to USA companies, and instead retaliated "without any worldwide legal basis or justification", Lighthizer said.

The country's Commerce Ministry earlier threatened "comprehensive measures", which were feared to include harassing American companies in China.

The Retail Industry Leaders Association, a lobby group representing the largest U.S. retailers, said: "The president has broken his promise to bring 'maximum pain on China, minimum pain on consumers'".

China on Wednesday said that it would strike back against the US after the Trump administration announced it would impose another 10 percent tariff on $200 billion worth of Chinese exports.

The Trump administration is readying tariffs on another $US200 billion of Chinese imports - ranging from burglar alarms to mackerel - escalating a trade war between the world's two biggest economies.

"The Chinese side is shocked by the actions of the U.S.", a statement on the ministry's website declared.

China is shocked by what the United States did... the Chinese government will, as always, be forced to take necessary countermeasures.

China Daily said in an editorial that Beijing had to stand up to Washington.

U.S. President Donald Trump has said he may ultimately impose tariffs on more than $500 billion worth of Chinese goods - roughly the total amount of U.S. imports from China a year ago.

A senior White House official told CNBC that the reason for the $200 billion figure was that it's "roughly equal to their exports to us".

The initial USA tariff list focused on Chinese industrial products in an attempt to limit the impact on American consumers.

Li said that the latest USA proposals would hurt both countries and pointed to declines in Chinese export growth and overseas investment to the U.S. in the first half of this year.

China could also limit visits to the United States by Chinese tourists, a business state media said is worth $115 billion, or shed some of its U.S. Treasury holdings, Iris Pang, Greater China economist at ING in Hong Kong, wrote in a note.

Last year, China only imported about $130 billion of US goods, so to retaliate it might increase the size of the tariffs it imposes or resort to what it calls "qualitative" measures, which USA businesses fear could mean reprisals against their China operations.

Last year, more USA crude oil was sent to China than any other destination except Canada, the EIA said in an analysis on Tuesday. That would leave China only US$80 billion for further retaliation.

That prompted fears it might go beyond matching Washington's duty increases by disrupting operations for USA companies in China.

The number of companies that felt policies had worsened for foreign firms fell to 23 percent from 33 percent, although 60 percent of respondents felt China's regulatory environment lacked transparency, on par with previous year.

Companies are watching U.S. chipmaker Qualcomm Inc., which has waited months for Chinese regulators to decide whether to allow its proposed US$44 billion acquisition of NXP Semiconductors.

Its finance minister also warned that the dispute would present "serious downward risks" to South Korea's export-reliant economy if the impact spread globally.

Hours after the announcement was released, China's Ministry of Commerce issued its own statement, expressing a "solemn protest" against the United States.

Members of Congress are increasingly questioning Trump's tactics.

The new list published on Tuesday targets many more consumer goods than those covered under the tariffs imposed last week, raising the direct threat to consumers and retail firms.

In financial markets, MSCI's broadest index of Asia-Pacific shares outside Japan fell 1.5 per cent, while the main indexes in Hong Kong and Shanghai fell more than 2 per cent.

The conflict is "far from over", warned Hannah Anderson of JP Morgan Asset Management in a report, "and the impact will be global".

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