The United States has imposed import tariffs on another $16bn in Chinese goods over what Washington has called rampant theft of US technology, even as trade negotiators were in talks to avert further confrontations.
The latest action completes the first round of $50bn in products that President Donald Trump targeted, after $34bn in goods were hit with punitive duties on 6 July.
China has said it will react immediately with tariffs on the same amount of US goods, targeting iconic products such as Harley Davidson motorcycles, bourbon and orange juice, among hundreds of others.
It came as the world's two largest economies were holding their first formal discussion since June on the spiralling and multifaceted trade war.
Mr Trump has pushed aggressive trade actions to lower the US trade deficit, which he equates with theft from Americans.
However US trading partners have retaliated aggressively, which is hurting US farmers, manufacturers and consumers.
US businesses have become increasingly concerned about the tariffs that are raising prices for manufacturers and could hurt the economy, although the prospect of a negotiated solution buoyed Wall Street this week.
However, Federal Reserve officials have warned that "an escalation in international trade disputes was a potentially consequential downside risk for real activity," according to the minutes of the 31 July-1 August policy meeting.
A large-scale and prolonged dispute would likely adversely impact business sentiment, investment spending and employment, the officials warned, and boost prices, which would "reduce the purchasing power of US households."
The possibility of new duties on another $200bn in Chinese goods, which are the subject of public hearings this week, are still pending, as well as Mr Trump's proposed 25% taxes on all auto imports to protect the US industry.
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Commerce Secretary Wilbur Ross has said China will not be able to continue to retaliate at the same pace as the US.
"Naturally they'll retaliate a little bit. But at the end of the day, we have many more bullets than they do. They know it," Mr Ross said on CNBC.
"We have a much stronger economy than they have, they know that too."
Mr Trump, who has threatened to target all $500bn in goods the US imports from China, has made that same point, noting that Beijing cannot continue to retaliate in kind since it imports less than $200bn a year in US goods.
US Treasury's David Malpass, undersecretary for international affairs, is leading two days of talks with China's Vice Commerce Minister Wang Shouwen, and Chinese Vice Finance Minister Liao Min that began yesterday.
The talks were to continue this morning, but the Treasury has not specified what topics are being discussed.
Mr Trump said earlier this week that he was not expecting much from the dialogue.
"We are a country that has been ripped off by anybody and we are not going to be ripped off anymore," Mr Trump said at a campaign rally in West Virginia on Tuesday.
"It has to be a two-way street. We only have one-way streets not only with China but everybody."
Thousands of large and small companies and industry groups have urged the Trump administration to reconsider the tariffs which some say could put them out of business.
But so far the Trump administration has largely been deaf to the complaints, as only a handful of product lines have been shielded from the punitive duties.
The administration already was forced to announce a $12bn aid programme for farmers hurt by the trade wars, as US agricultural products, like soybeans, were an easy target for China and others.
