Donald Trump ratchets up the pressure on China by ordering new tariffs on US$200 billion worth of Chinese goods.
"If the United States insists on raising tariffs even more, China will respond accordingly", the finance ministry said in a statement.
Beijing had previously warned that it would target $60 billion in USA goods if Trump made good on his threat to impose the new tariffs.
Mr Trump said that the USA will immediately pursue additional tariffs on about $267 billion of Chinese imports if Beijing hits back to the US$200 billion round.
This second round of tariffs follows on tariffs of 25 percent on $50 billion in Chinese goods that Trump announced on June 15.
Ahead of Beijing's announcement, US Commerce Secretary Wilbur Ross told CNBC that China should not have been surprised by the Trump administration's latest measures, and said "the question about whether or when to have a discussion is very importantly in [China's] ballpark".
Introducing tariffs on goods originating from China is unlikely to help American businesses or consumers.
President Donald Trump said the latest round of tariffs was in response to China's "unfair trade practices, including subsidies and rules that require foreign companies in some sectors to bring on local partners".
Rep. Kevin Brady (R-TX, chair of the House Ways and Means committee): "Any time tariffs are imposed I worry that Americans will be forced to pay extra costs - in this case on almost half of U.S. imports from China", Brady said.
The latest clash deepens the conflict between the world's top two economies that is already hurting companies on both sides of the Pacific.
The iPhone was not among the "wide range" of products that Apple told regulators would be hit by the $200 billion round of tariffs in a September 5 comment letter to trade officials.
"Ongoing uncertainty about trade policy had led to volatility in the prices of some commodities", the board's minutes said. And China has retaliated in kind, hitting American soybeans, among other goods, in a shot at the president's supporters in the USA farm belt. It could have the opposite effect: products could become more expensive, companies might stop making specific goods, and some people could lose their jobs as their employers scramble to cut the effects the costs imposed by these tariffs could have on their business.
Beijing has retaliated in kind, but some analysts and American businesses are concerned it could resort to other measures such as pressuring United States companies operating in China.
Vice-Premier Liu He convened a meeting in Beijing on Tuesday morning to discuss the government's response to the U.S. decision, Bloomberg News reported, citing a person briefed on the matter.
While Trump wants United States companies to shift their manufacturing from China and elsewhere to the U.S., not only would that make the USA companies higher cost and less competitive in worldwide markets but it could take years to build the manufacturing plants or re-engineer supply chains.
Adam Posen, a leading trade expert and President of the Peterson Institute for International Economics, said at a forum Monday that the tariff strategy is destined to fail, as it will not resolve trade disputes but will stifle US competitiveness and undermine consumption power of the USA working class.
"The President really hates the bilateral trade deficit with China", Mr Scissors said. Those goods will now be taxed 10 per cent.