China won't accept U.S. trade 'blackmail': state media

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But Mr. Trump raised the stakes this week by asking the U.S. Trade Representative to consider increasing the proposed tariffs on the $200 billion worth of goods to 25%.

The US has already imposed tariffs on Chinese goods worth $US34 billion ($A46 billion), with further tariffs on goods valued at $US16 billion expected to follow.

The U.S. -China trade relationship is estimated at $650 billion annually. Still, in response to Trump's tariffs, China retaliated with a 25 percent tariff on soybeans.

At a time when China is opening its domestic market to more foreign trade and investment than at any time in China's modern history, policy makers in Beijing have opted to retaliate against America's ongoing tariff onslaught in a manner that will force USA producers to apprehend the reality that in a prolonged trade war of Washington's own making, U.S. industries will be the penultimate victims.

The minister added: "China has to take necessary countermeasures to defend its dignity and the interests of its people".

"We are using them to negotiate fair trade deals", Trump said.

Meanwhile, Chinese state TV said: "The White House's extreme pressure and blackmail are already clear to the worldwide community". "He is going to stand tough".

The United States alleges that China steals U.S. corporate secrets and wants it to stop doing so, and is also seeking to get Beijing to abandon plans to boost its high-tech industries at America's expense. Washington also wants China to stop subsidising Chinese companies with cheap loans, claiming that this allows them to compete unfairly.

But whatever the reason, the longer the trade war continues, the more Trump will find himself in a bind: on one hand he wants lower rates and a weaker dollar, on the other he keeps escalating by enacting ever bigger (and higher) tariffs on China, which are sure to prompt a broad inflationary response in the United States economy as we have already discussed. "It has seriously violated the principles of the World Trade Organisation", Hong Kong-based South China Morning Post quoted the statement as saying.

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The Chinese reaction is sure to ratchet up tensions with the Trump administration at the end of a week that saw stock markets rattled by the intensifying trade battle.

The two countries have not had formal talks on the trade dispute since early June.

"We are coming together with the European Union to make a deal with them so we will have a united front against China", National Economic Council Director Larry Kudlow told Fox Business News.

"As to whether China's economy is doing well or not, I think it is all too clear to the whole worldwide community", Wang said, adding that China contributed a huge amount to global economic growth.

The commerce ministry threat came after Wang met with US Secretary of State Mike Pompeo at a meeting of the Association of Southeast Asian Nations (ASEAN) in Singapore on Friday.

However, speaking to reporters at the White House, Mr Kudlow said there had been some communication on trade "at the highest level" in recent days.

Last month, the White House offered government assistance to farmers hurt by the trade dispute.

Starting with the latter, and continuing the tit-for-tat retaliation in the trade/currency war, higher-than-anticipated tariffs will encourage Beijing to let the yuan slide even more, exacerbating the currency war and potentially making Trump dictate monetary policy to the Fed. LNG's inclusion marks a deployment by Beijing of one of its last major weapons from its energy and commodities arsenal in its fight with Washington. But billions of dollars in tariffs have already been imposed on imports and exports between the two countries.

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