Then China followed suit, unveiling 25 per cent duties on US$50 billion in USA imports - matching the U.S. rates.
China shipped far more goods to the United States ($505 billion past year, according to U.S. figures) than came back in the opposite direction ($130 billion).
It also said it was scrapping deals made with Washington to narrow China's politically volatile trade surplus with the United States by purchasing more American farm goods, natural gas and other products.
China bought American goods worth $153.9 billion past year, while exports to the United States totaled $429.8 billion, according to customs data.
On Monday, Trump said China's tit-for-tat tariff response illustrated the country's unwillingness to change its "unfair practices".
If Trump does impose these additional tariffs, the US will have imposed tariffs on $450 billion in Chinese goods.
"Investors are waking up to the idea that all the rhetoric on trade could be more than just a negotiating tactic", said Emily Roland, head of capital markets research at John Hancock Investments in Boston.
China will fight back firmly with "qualitative" and "quantitative" measures if the United States publishes an additional list of tariffs on Chinese goods, the commerce ministry said, accusing the USA of initiating a trade war.
"If the USA acts irrationally and issues a list, China will have no choice but to take comprehensive measures of a corresponding number and quality and take strong, powerful countermeasures".
The Shenzhen Composite Index, which tracks stocks on China's second exchange, was also down, dropping 5.77%, or 97.60 points, to 1,594.05 on turnover of 232.5 billion yuan (RM145 billion).
However and unfortunately, China has determined that it will raise tariffs on $50 billion worth of United States exports.
Trump's proposed new duties, as with the initial tariffs, alarmed the US business community.
According to the New York Times, the President slammed Beijing's unfair trade policies and currency manipulation in a written statement, saying China has "no intentions" of changing their practices that continue to "threaten" American workers and businesses. "It is very unfortunate that instead of eliminating these unfair trading practices, China said that it intends to impose unjustified tariffs targeting USA workers, farmers, ranchers and businesses".
By contrast, Trump's supporters in agricultural areas are already bristling at his protectionism.
The president warned that he was prepared to hit China with an additional $200 billion in import taxes unless Beijing capitulates.
It has informed the World Trade Organization (WTO) that it plans to impose retaliatory measures on United States goods to the tune of 50 billion yen (395 million euros, $455 million), after failing to persuade Washington to exempt it from the tariffs.
But Beijing's mention of "comprehensive measures" suggests that it would go beyond tariffs, said Jake Parker of the U.S.
In an interview with CNN earlier this month, Apple CEO Tim Cook said he didn't expect a full-blown trade war to break out and dismissed the notion that iPhones, which are assembled in China, would end up subject to tariffs. "What the president did yesterday makes it clear that they have much more to lose in this dispute than the U.S".