The US is considering 25% tariffs on $200bn (£152bn) of Chinese goods - more than double the 10% initially planned.
"In light of China's decision to respond to the investigation by imposing duties on USA goods, the Trade Representative proposes a modification of the action taken in this investigation".
President Donald Trump said that if China is not willing to reach an acceptable trade deal, he is prepared to slap tariffs on all Chinese imports to the USA, which amounted to $505.5 billion a year ago alone.
There are also reports that representatives of U.S. Treasury Secretary Steven Mnuchin and Chinese Vice Premier Liu He are having private conversations as they too look to reengage in negotiations.
Holding an open door to talks while threatening worse consequences represents yet another increase in tension in the months-long standoff between the world's two largest economies over commerce.
Erin Ennis, senior vice president of the U.S. China Business Council, said a 10 percent tariff on these products is already problematic, but more than doubling that to 25 percent would be much worse.
China's Ministry of Foreign Affairs said it will fight back should the US further increase tariffs.
"We urge the United States to correct its attitude and not to try to blackmail China because it will never work", said Geng at a news conference.
"While China is ready to talk to anyone ready to talk to us, including the United States, this kind of dialogue has to take place on the basis of mutual respect and equality", he said.
Washington touted its initial tariffs as being carefully constructed to avoid having a big impact on USA consumers and companies, but the expansion of the tariff lists has drawn in more goods that can not be imported from outside China.
Trump also got more pushback on his tariff plans from the U.S. Congress on Wednesday as a bipartisan group of senators, led by Republican Rob Portman of OH, launched new legislation that would scale back the president's power to impose tariffs for national security reasons under a Cold War-era trade law.
Announcing a higher tariff is required ahead of the hearings and will send a signal that the Trump administration is upping the pressure on China to make serious concessions.
Chinese-made children's shoes bearing a Chinese map and US flags on display for a sale at a shop in Beijing July 13. The yuan fell against a trade-weighted basket of currencies to a level that's near the lowest on record, suggesting policy makers are allowing further weakness.
This next wave of tariffs was originally announced in July, after China hit the U.S. with countermeasures in response to Trump's initial wave of tariffs.
"China is the Cambodian people's closest, most reliable friend", he said, according to the Chinese statement.
"We have been very clear about the specific changes China should undertake".
Shi is one of several Chinese experts to have suggested that Washington is using the trade dispute to curtail China's efforts to develop its economy, technology and military.