That happened after the US President gave some clues about the possibility for introducing new tariffs on the US $200 billion worth of Chinese goods. "Further action must be taken to encourage China to change its unfair practices, open its market to United States goods and accept a more balanced trade relationship with the United States", Trump said in a statement.
Such a step would be virtually unprecedented in USA history and would put almost all of the $505 billion in products that the US imports from China under trade restrictions.
"As China hawks, like (Robert) Lighthizer and (Peter) Navarro, appear to have gained power within the Trump administration lately, an all-out trade war now seems more inevitable", said Yasunari Ueno, chief market analyst at Mizuho Securities. The price the United States wants is not only to take advantage of China; even more so it wants to wreck China's economy.
The ministry's description of a combination of "quantitative and quality measures" under consideration indicates that the trade war will enter a new stage, experts said.
This possible trade war now is threading to create more pressure on the Chinese economy.
"China could target US firms through tax and regulatory policies", said Citigroup in a report.
The Canadian dollar weakened to a one-year low of C$ 1.3237 overnight, before paring some of its losses on Tuesday, as investors anxious about Canada's trade feud with the United States.
U.S. automakers may miss a golden chance to expand their footprint in China if the Trump administration sticks to trade protectionism and keeps destroying free trade, Wei said. Navarro explained it's just a trade conflict, . adding that President Trump has a close personal relationship with his Chinese counterpart.
President Donald Trump directed the US Trade Representative's office to draw up a list of $200 billion worth of Chinese goods to subject to an additional 10% tariff.
"No Chinese leader is going to want to appear to be pushed around by any U.S. president so they are retaliating and digging their heels in", said Mark Avallone, President and Founder of Potomac Wealth Advisors.
"I have to point out that United States remarks confused right with wrong and made irresponsible accusations against China to cover up its unilateral and protectionist moves", Chinese Foreign Ministry spokesman Geng Shuang said when asked to comment on Pompeo's statement.
'Unacceptable' The China trade offensive is only one side of Trump's multi-front battle with the United States' economic partners as he presses ahead with his protectionist "America First" agenda. If Intel makes a chip at its US plants in Oregon, Arizona or New Mexico, then sends it to China for low-level assembly work and then brings it back so it can be put into a device manufactured in the United States, the chip would get hit by the tariff.
European Chamber President Mats Harborn said at a briefing on the group's survey that 2018 had to be the year when Beijing delivered on its promises, and that it should make serious commitments to defuse trade tensions.
China is retaliating by raising import duties on $34 billion worth of American goods.
USA tariffs on imported steel and aluminum have already drawn a response from a range of countries including Canada, Mexico and the European Union.
That comes after the USA on Friday announced that it would impose a 25 percent tariff on up to $50 billion of Chinese products.