China has raised tariffs on more than 5,000 US products, with the new rates ranging from 5% to 25%. The new tariffs will come onto force from June 1st. The move comes three days after the US more than doubled tariffs on 200 billion US Dollars of Chinese imports.
The escalation sent stock markets down, with the Dow Jones Industrial Average closing more than 600 points lower.
US President Donald Trump had warned China not to raise levies but Beijing said it would not swallow any "bitter fruit" that harmed its interests. China has raised tariffs on more than 5,000 US products, with the new rates ranging from 5% to 25%.
Items affected include beef, lamb and pork products, as well as various varieties of vegetables, fruit juice, cooking oil, tea and coffee. Chinese foreign ministry spokesman Geng Shuang told a news briefing in Beijing that China would "never surrender to external pressure".
Stock markets in both Europe and the US fell. The Dow Jones finished 2.25% lower while the S&P 500 ended 2.49% down and the Nasdaq index lost 3.4%. In London, the FTSE closed 0.5% lower, while the main indexes in Frankfurt and Paris were more than 1% lower.
The latest round of US-Chinese trade negotiations ended in Washington on Friday without a deal. The US argues that China's trade surplus with the US is the result of unfair practices, including state support for domestic companies.
It also accuses China of stealing intellectual property from US firms. As well as ordering a tariff increase on $200bn worth of Chinese imports, Trump also directed the US trade department "to begin the process of raising tariffs on essentially all remaining imports from China", estimated to be valued at around $325bn.
Though on Monday, Trump said that he had "not made a decision" on whether to go ahead with those additional levies.