Also, U.S. exports to China only accounted for 1 percent of U.S. GDP before the dispute began, meaning that a complete cessation "would have only a modest impact on U.S. GDP growth".
The pan-European STOXX 600 index lost 1.21%. The S&P 500 was trading 4.4 per cent below its all-time high close.
In essence, China will tax the same goods they did before.
The result has been a volatile week-long roller coaster with no end in sight.
The ongoing trade dispute continued to roil markets Monday, with the Dow dropping more than 500 points on the open following the news that China would move to counter USA tariffs.
Last Thursday morning the Dow skidded 580 points, only to regain almost 470 by close of trading on Friday.
In a series of opinion pieces and on-air editorials, the country's government controlled media used strong and nationalistic language to reassure a shaky domestic audience that China's economy can weather the higher tariffs imposed last Friday by US President Donald Trump. If China settles the trade issue with the United States and reopens its manufacturing capacity, the costs would drop dramatically and the expanded jobs in the U.S. would evaporate ... exactly as they did before. "The only problem is that they know I am going to win (best economy & employment numbers in USA history, & much more), and the deal will become far worse for them if it has to be negotiated in my second term".
Trump's pledge on Friday to buy American farm products that China normally imports and distribute them to poor countries drew criticism from Canada. You had a great deal, nearly completed, & you backed out!' Trump wrote on Twitter.
If the trade war escalates, Australia may well find out.
In the meantime, American consumers will pay the freight for tariffs on China's goods, at least directly, despite Trump's argument.More news: Fox to Cancel Empire After Season 6, Jussie Smollett Not Returning
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The president said Monday that that's not inevitable.
Duties of 5% to 25% will take effect on June 1 on about 5,200 American products, including batteries, spinach and coffee, China's Finance Ministry said. "But the latest tariff escalation is far too great a gamble for the USA economy".
The newly accelerated goal - an endeavor likely to cost tens of billions of dollars - comes as NASA has struggled with the help of private partners to resume human space missions from US soil for the first time since the shuttle program ended in 2011.
The president suggested that manufacturers who make goods in China could shift production to other countries to avoid the tariffs.
The president started raising tariffs last July over complaints China steals or pressures foreign companies to hand over technology and unfairly subsidizes Chinese businesses that are striving to become global leaders in robotics and other technology. That's why China wants to make a deal so badly! Regulators have targeted American companies in China by slowing down customs clearance for shipments and processing of business licenses. "We have had unfair trading practices all these years and so in my judgment, the economic consequences are so small, but the possible improvement in trade and exports and open markets for the United States - this is worthwhile doing".
Kudlow also argued that Trump's trade policies were "a risk we should and can take without damaging our economy in any appreciable way".
The White House is now considering levying tariffs on another $300bn worth of Chinese consumer products.
"I love the position we're in", Mr. Trump told reporters at the White House just before meeting with Hungarian Prime Minister Viktor Orban.
The Chinese response was announced soon after Trump warned Beijing not to retaliate.