Trade war escalates as Trump imposes tariffs on $200bn of Chinese goods

Trump also warned that if China takes retaliatory action against USA farmers or industries, "we will immediately pursue phase three, which is tariffs on approximately US$267 billion of additional imports".

China has announced a "synchronized" retaliation against the latest tranche of tariffs levied against the country by the U.S.

"The US insists on increasing tariffs, which brings new uncertainty to the consultations between the two sides", the ministry said.

The higher import taxes will start from Monday at 10% before rising to 25% on 1 January, the White House announced.

Trump also accused China of actively targeting the USA election on Tuesday, but offered no evidence to back up his allegation.

The United States complains Chinese industry development plans including "Made in China 2025", which calls for creating global champions in robotics and other fields, are based on stolen technology, violate Beijing's market-opening commitments and might erode American industrial leadership. "But, so far, China has been unwilling to change its practices".

The taxes will take effect from 24 September, starting at 10% and increasing to 25% from the start of next year.

The iPhone maker's shares were down 2.7 percent, providing the biggest drag on the Dow, despite earlier reports that the United States would spare some of its products in the latest round of tariff actions. However, should China retaliate - Bloomberg headlines suggest there will be retaliatory tariffs launched simultaneously - then all Chinese imports into the U.S. will face tariffs.

In the letter sent earlier this month, Apple said a range of its products would be hit and warned that the proposed tariffs, which could lead to higher production costs, higher consumer prices and "lower overall US economic growth, and other unintended economic consequences".

According to Reuters, smart watches from Apple and Fitbit, as well as some consumer safety products, such as bicycle helmets and baby auto seats, are exempt from the new tariffs.

But demand for Chinese products on American soil has jumped amid rising tensions: The latest census data, released Wednesday, showed the US goods deficit with China this year has grown about 8 percent to $234 billion from the same time last year.

Trump making good on a threat earlier in the day on Twitter: "If countries will not make fair deals with us, they will be Tariffed!"

"It is hoped that the U.S. will recognise the possible negative consequences of such actions and take convincing means to correct them in a timely manner", the ministry said, without directly addressing if the talks would go forward.

Chief executive Fred Smith told analysts on Monday that the US-China trade spat "is worrisome to everyone".

But market watchers reckon further escalation is likely.

While US inflation has continued to rise steadily albeit modestly, firms across the country report lost businesses, layoffs and possible bankruptcies as input costs rise and exports fall.

China had previously vowed to retaliate further against any new USA tariffs, with state-run media arguing for an aggressive "counterattack". More broadly, tariffs will lead to higher United States consumer prices, lower overall USA economic growth, and other unintended economic consequences. But some Democrats, who broadly oppose the president's agenda and are banking on his unpopularity, have adopted critical views of trade agreements and free trade.