The president earlier ordered 25 percent tariffs on $50 billion in Chinese goods as punishment for Beijing's forced transfer of us technology on companies doing business in China, and for intellectual property theft.
If the tariffs the two countries have threatened to slap on each other's exports take effect, their consumers would have to pay higher retail prices. Earlier this month, the Trump administration gave ZTE a reprieve for breaking a sanctions settlement after the company agreed to pay fines, change management and agree to American oversight.
The International Business Forum's Stephen Jacobi said the escalation of the tension was worrying for New Zealand in the medium to long term as it threatened to dampen global growth and undermine existing trade rules. "China has, for example, always been engaging in several unfair practices related to the acquisition of American intellectual property and technology", Trump declared last week. The list was created using a computer algorithm that chose products to hurt Chinese exporters while limiting the impact on USA buyers.
"If the United States loses its senses and publishes a new list, China will be forced to take comprehensive measures that are both strong in quantity and gravity and will fight back", it read.
Trump's latest salvo in a brewing trade war would mean a sizable amount of Chinese goods shipped to the US would be exposed to tariff threats and raises new questions about the impact on American consumers.
China, which has been retaliating with its own tariff threats, warned that the only loser in the trade fight will be the USA economy.
The move quickly drew praise from former Trump senior adviser Steve Bannon, who told The Associated Press: "President Trump told China and the world tonight that America will not back down when it comes to economic aggression".
Demand for safe havens saw yield on the 10-year benchmark U.S. Treasury drop to its lowest in more than two weeks.
A screen displays the Dow Jones Industrial Average after the closing bell on the floor of the New York Stock Exchange (NYSE) in New York, U.S., June 19, 2018.
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"This is a trade dispute, nothing more", Navarro said.
China's Commerce Ministry fired back in a statement, "The United States has kept changing its mind and now launched a trade war".
"'We still see follow-through weakness for the C-dollar". A small handful of countries were given exemptions, but China was not one of them.
China protects its companies in many sectors, especially high-tech.
He said the move would be in retaliation for China's decision to raise tariffs on $US50 billion in goods.
"This latest action by China clearly indicates its determination to keep the United States at a permanent and unfair disadvantage", the White House said, citing a "$376 billion trade imbalance".
However, business expert Derek Scissors of the American Enterprise Institute says the US could gain from the dispute.
Most of that trade is in goods - not services - and most of it flows from China to the United States.