China is running out of USA imports for penalties due to their lopsided trade balance. And officials have targeted American companies operating in China by slowing customs clearance and stepping up regulatory scrutiny.
Trump has insisted that China has picked up the tab for his tariff campaign, not American consumers. "China should not retaliate - will only get worse!"
Forecasters warned Friday's hikes could disrupt a Chinese recovery that had appeared to be gaining traction.
Imposing those tariffs would impact a wide range of consumer goods - clothes, shoes, toys, and electronics such as iPhones - that have been mostly exempted so far and could prompt steep cost increases that many Americans would likely notice. Nearly 2,500 items will be subject to 25 percent tariffs, while more than 2,000 others will have smaller tariff increases.
While Kudlow said that China has invited top U.S. trade officials to Beijing to continue talks, no date for a potential 12th round of negotiations has been announced. That would push annual growth below six per cent, raising the risk of politically unsafe job losses.
Two days of trade negotiations between US and Chinese representatives broke up Friday without any agreement.
The chief Chinese envoy, Vice Premier Liu He, told state TV the remaining issues had to do with principles and "we will make no concessions on matters of principle".
China will never surrender to external pressure. "These massive payments go directly to the Treasury of the U.S". Economists say Chinese leaders probably reject that as a violation of Chinese sovereignty.
Trump's surprise tariff announcement renewed anxiety in financial markets about global economic growth.
The tech-heavy NADAQ stock index was down 1.3 per cent in early morning trading. Shares also fell in Taiwan and Southeast Asia.
Chinese had collected duties of 5% to 25% on almost 2,500 goods before the latest hike.
This latest round of tariffs will add another $500 a year in costs for the average American household, says Katheryn Russ, an economics professor at the University of California at Davis.
The latest round of U.S. tariff increases on Chinese goods would affect market sentiment in the short term rather than Taiwanese technology chains, market watchers said last week.
The trade war escalated on Friday after Trump hiked tariffs on $200 billion worth of Chinese goods, saying China had reneged on earlier commitments made during months of trade negotiations.
"The risk of a full blown trade war has materially increased", they said in a report.
"Yes, I don't disagree with that, ' said Kudlow, while insisting that 'both sides will pay" - and Beijing more than Washington as Trump's prediction comes true and companies relocate from China to other nations with free or freer US trade arrangements. "Remember, they broke the deal with us and tried to renegotiate", Trump said justifying his decision to impose a hefty tax on Chinese products.
"It's no big deal".
The additional tariff of 25% will be levied against 2,493 goods including liquefied natural gas, soy oil, peanut oil, petrochemicals, frozen vegetables and cosmetics, the ministry said, and of 20% on 1,078 products.