"It is totally unacceptable for American side to publish a tariff list in a way that is accelerating and escalating," said a Commerce Ministry statement. "To protect the core interests of the nation and its people, the Chinese government will be forced to impose necessary countermeasures."
The USTR said the latest action was in response to Beijing's failure to change its policies and its retaliatory duties. President Donald Trump has threatened higher tariffs on more than US$500b of goods, or nearly all of China's annual exports to the United States.
The USTR will accept public comments and hold hearings August 20-23 before reaching a decision after August 31, according to a senior US official who briefed reporters on condition of anonymity.
The first US tariff list focused on Chinese industrial products to help cushion the impact on American consumers. The latest list hits items that US households buy, including electric lamps, apple juice and fish sticks.
Beijing's lopsided trade balance with the United States means it will quickly run out of imports for retaliation. China imported US goods worth US$130b last year and Friday's tariff hike hit US$34b of that, with another US$16b cited for a possible increase.
China "cannot match fresh US tariffs," Vishnu Varathan of Mizuho Bank said in a report.
Instead, its heavily regulated economy gives Beijing tools to disrupt operations for American automakers, restaurant chains and other companies that are looking to China to drive revenue growth. Regulators can deny or cancel licenses or tie up companies by launching tax, environmental or anti-monopoly investigations.
Companies are watching US chipmaker Qualcomm Inc., which has waited for months for Chinese regulators to decide whether to allow its proposed US$44b acquisition of NXP Semiconductors. All other major governments have approved the deal.
The economic impact of the conflict already is spreading.
The European Union Chamber of Commerce in China said this week its member companies are rearranging their trade shipments to ensure any bound for the United States don't pass through China.
Members of Congress are increasingly questioning Trump's aggressive trade policies, warning that tariffs on imports raise prices for consumers and expose US farmers and manufacturers to retaliation abroad.
"Tonight's announcement appears reckless and is not a targeted approach," said Senate Finance Chairman Orrin Hatch in a statement.
Investors had been taking the trade war in stride but Tuesday's announcement appeared to dent that optimism.
On Wednesday, Japan's stock market benchmark fell 1.2 per cent while Hong Kong's main index lost 1.7 per cent and the Shanghai Composite index dropped 2.1 per cent.
The conflict is "far from over," Hannah Anderson of JP Morgan Asset Management warned in a report, "and the impact will be global."
- AP
