President Donald Trump is moving ahead with steps to protect USA intellectual property by punishing China with broad investment restrictions, litigation at the World Trade Organization and hefty tariffs on $50 billion worth of Chinese goods.
The White House said it also would impose restrictions on Chinese investment and purchases of high-tech exports.
In retaliation, China threatened to impose a 25 percent tariff on Dollars 50 billion worth of United States exports. The full list of imports that will be covered will be announced by June 15.
In a May 24 meeting with President Xi Jinping, German Chancellor Angela Merkel said market access and reciprocity will play a big role in trade relations.
Threats of a trade war between the United States and China had hit financial markets hard, although now most economists believe the two will manage to avoid a major economic conflict.
"The statement yesterday "historic" in nature is twofold one the President is going to levy a 25 percent tariff on $50 billion worth of Chinese exports to us".
China's Commerce Ministry criticized Tuesday's announcement as "contrary to the consensus we reached" in talks in mid-May, when American officials postponed a tariff hike after Beijing promised to buy more USA goods.
Navarro said the administration is prepared for retaliation from China.
The announcement came just ahead of US Secretary of Commerce Wilbur Ross's visit to China from Saturday.
Liu said a fortnight ago that a deal had been struck for China to increase imports of USA energy, agricultural, health, high-tech products and financial services.
Beijing has already pledged to retaliate against the tariffs.
The exchange of tough messages has made it more unlikely that the two sides will reach a compromise on their trade disputes at scheduled talks this weekend - if they are happening at all.
The White House also pledged to continue a WTO case it started in March on accusations that China's intellectual property practices violate global trade law. If the fight is truly about intellectual property theft, the United States could likely recruit some of its allies to help apply pressure. China accused Trump of flip-flopping on trade.
The new restrictions could go into effect June 11, and the State Department reserves the right to place an earlier date of expiration on select visas. The dispute was initiated in March over Beijing's "discriminatory technology licensing requirements", the White House said.
In response, China says it has the confidence, capability and experience to defend the interests of Chinese people and the core interests of the country.
Such practices "champion Chinese firms and make it impossible for many USA firms to compete on a level playing field", the White House said.