China has seven weeks to make a deal or dig in and try to outlast the USA leader.
The Retail Industry Leaders Association, a lobby group representing the largest United States retailers, said: "The president has broken his promise to bring 'maximum pain on China, minimum pain on consumers'".
"Rather than address our legitimate concerns, China has begun to retaliate against U.S. products ..."
The Trump administration on July 6 imposed 25 per cent duties on US$34 billion in Chinese imports, the first time the president has implemented tariffs directly on Beijing after threatening to do so for months. "There is no justification for such action".
But China also faces difficulties in retaliating directly: it ships far more goods to the United States ($506 billion previous year, according to U.S. figures) than come back in the opposite direction ($130 billion).
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Chinese tactics, the administration said, include outright cybertheft and forcing US companies to hand over technology in exchange for access to the Chinese market. The administration says its tariffs are created to punish China for what it calls unfair trade practices, theft of intellectual property, and "forced technology transfers".
In addition, the U.S. is considering duties on a further US$16 billion in Chinese goods, after a public hearing later this month.
"Although I have supported the administration's targeted efforts to combat China's technology transfer regime, tonight's announcement appears reckless and is not a targeted approach", said Sen. The U-S Chamber of Commerce says the proposed measure would ultimately hurt American families.
Analysts say the Chinese government could target trade in services between the two countries, such as tourism and education, or seek to make life hard for big American companies operating in China.
"The behavior of the U.S. is hurting China, hurting the world, and hurting itself", the ministry said in a statement, adding that it was "shocked" by USA actions. The Chinese government's industrial strategy to make its goods competitive on the global market, in place since 2015, seems to have been one of the key instigators of Trump's trade war.
"The markets still remain sensitive to the trade-related theme, which is something investors have to take into account for the long term", said Yoshinori Shigemi, global market strategist at JPMorgan Asset Management in Tokyo.
According to the US, China uses predatory practices in a push to challenge American technological dominance - and allegedly forces American companies to hand over technology in exchange for access to the US market.