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Senior administration officials told reporters Wednesday that Trump asked the US Trade Representative to explore the possibility of imposing a 25% tariff on $200 billion worth of Chinese imports to the US.

USA threats have escalated since, with the President saying he is ready to impose tariffs on all $500bn of Chinese imports.

China's Commerce Ministry said in a seperate statement Beijing's new set of proposed import tariffs on USA goods were rational and restrained.

Administration officials at the time said the tariff fight was aimed at forcing China to stop stealing American intellectual property and to abandon policies that effectively force USA companies to surrender their trade secrets in return for access to the Chinese market.

"If the United States takes further measures that escalate the situation, China will definitely fight back", said Geng.

But what exactly prompted Trump to push for the sharp reset in Chinese tariffs?

Derek Scissors, a China scholar at the American Enterprise Institute in Washington, said a 25% tariff rate is more likely to shut out Chinese products and shift American supply chains to other countries, as a 10% duty could be offset by government subsidies and weakness in China's yuan currency.

Chinese leaders have offered to narrow their politically sensitive trade surplus with the United States by purchasing more American goods.

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Trump administration officials say the U.S.'s robust economy gives it the high ground in the trade battle against China, which is showing signs of an economic slowdown.

Increasing the pressure on China by threatening even higher tariffs could backfire.

The US is considering 25% tariffs on $200bn (£152bn) of Chinese goods - more than double the 10% initially planned. The U.S. exports goods to China amounting to $130 bln, so it is unlikely that it will be able to respond with a proportionate expansion.

This next wave of tariffs was originally announced in July, after China hit the U.S. with countermeasures in response to Trump's initial wave of tariffs.

Trump directed trade representative Robert Lighthizer to raise the tariff rate to 25%, the people said, adding that the change isn't final yet and may not go forward after a public review. "Unilateral threats and pressure will only be counterproductive".

"We urge the United States to come to its senses, correct its erroneous acts and create the necessary condition for a proper settlement as soon as possible", spokesman Geng Shuang said. Concerns about the trade war are popping up in various business and consumer confidence surveys, prices for goods hit by various tariffs are on the rise, and businesses are starting to feel the squeeze from the increased prices. It said retaliatory duties of between 5 and 25 per cent will be imposed on 5,207 products "if the US side persists in putting its tariff measures into effect".

China upholds the use of dialogue to resolve disputes but equal treatment and keeping to promises are pre-requisites for dialogue, it said in a statement.

Ed Bryztwa, director of worldwide trade at the American Chemistry Council, was especially concerned about the additional tariffs, even before the threat of more than doubling the tariff rate.


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