"On June 18, the President directed me to identify $200 billion worth of Chinese goods for additional tariffs at a rate of 10 percent, in response to China's decision to cause further harm to USA workers, farmers, and businesses by imposing retaliatory duties on US goods".
"The increase in the possible rate of the additional duty is meant to provide the administration with additional options to encourage China to change its harmful policies and behavior and adopt policies that will lead to fairer markets and prosperity for all of our citizens", he said.
Retaliatory tariffs were necessary, China says, to "defend the dignity of the country and interests of its people" as well as "the mutual interest of all the countries in the world".
Trump has ultimately threatened tariffs on more than $500 billion in Chinese goods, covering virtually all US imports from China.
"Secondly, we would advise the United States side to return to reason, and not blindly let emotions affect their decisions, because in the end this will harm themselves", he said. "Regrettably, instead of changing its harmful behavior, China has illegally retaliated against USA workers, farmers, ranchers and businesses".
If Trump imposes the new duties on China as well as a threatened third set of tariffs on another $US200 billion of imports, effectively all of the Asian nation's US exports would be impacted.
As the trade dispute between the world's two largest economies enters its second month, Mr Trump's administration said it was proposing a higher 25 percent tariff, up from the previously proposed 10 percent in July.
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China urged the United States to return to reason after the Trump administration sought to ratchet up pressure for trade concessions by proposing a higher 25 percent tariff on US$200 billion worth of Chinese imports, Reuters reports.
- China yet to retaliate but Dollars remains bid, risk assets lower.
"China is forced to take countermeasures", said a ministry statement.
Much of American industry and many members of Trump's own Republican Party have expressed outrage but have so far been unable to thwart Trump's trade policies. Beijing retaliated by imposing similar charges on the same amount of US products. It wants China to stop stealing USA corporate secrets, abandon plans to boost its high-tech industries at America's expense and stop subsidizing Chinese companies with cheap loans that enable them to compete unfairly.
Whether or not the duties ultimately go into effect, the uncertainty is already creating turmoil for several businesses as they weigh their options for sourcing and production, with some scrambling to import goods before next month.
Trade tensions between the USA and China have been escalating for months, driven by President Trump's aggressive rhetoric and policy positions.
The US trade deficit recorded its biggest increase in more than 1-1/2 years in June as the boost to exports from soybean shipments faded and higher oil prices lifted the import bill. "Regrettably, instead of changing its harmful behaviour, China has illegally retaliated against United States workers, farmers, ranchers and businesses", Lighthizer said in a statement.
One person familiar with the internal deliberations said the United States is trying to secure certain concessions and if China agrees, it is possible the United States would back off additional tariffs.