Administration officials told reporters in a phone briefing later that President Donald Trump had directed trade officials to consider raising proposed tariff rates on US$200 billion worth of Chinese imports from 10% to 25%, multiple news outlets reported.
The proposal would increase the potential tariff rate from 10 percent the administration had initially put forward on July 10 for that wave of duties in a bid to pressure Beijing into making trade concessions, a source familiar with the plan said on Tuesday.
The higher tariff rate, if implemented, would apply to a list of goods valued at $200 billion identified by the USTR last month as a response to China's retaliatory tariffs on an initial round of US tariffs on $34 billion worth of Chinese electronic components, machinery, autos and industrial goods.
"The increase in the possible rate of the additional duty is meant to provide the Administration with additional options to encourage China to change its harmful policies and behavior and adopt policies that will lead to fairer markets and prosperity for all of our citizens", he said.
Trade tensions between the USA and China have been escalating for months, driven by President Trump's aggressive rhetoric and policy positions.
In early July, the USA imposed 25 per cent tariffs on an initial $34 billion of Chinese goods.
Trump has imposed tariffs on Chinese steel and aluminum imports and another $34 billion in goods, mostly industrial equipment.
Trump has threatened to slap tariffs on virtually all of China's exports to the United States.
The threats and counterthreats have stirred increasing unease from US business and farm groups, which argue that they are the ones losing money and business based on all the new restrictions.More news: Engine flaw delays Boeing test of crew capsule to 2019
The list named more than 6,000 items including food products, steel and aluminum, minerals and consumer goods such as handbags, dog food, furniture and carpets to auto tires, bicycles, baseball gloves and beauty products.
"The escalating trade tensions have everyone in the industry concerned", said Port of Long Beach Executive Director Mario Cordero in a news release, although she also attributed high volumes to strong global economies.
A second round of tariffs on products worth $16 billion could take effect as soon as this week, CNN reported. The trade gap narrowed in April and May as farmers front-loaded soybean exports to China before Beijing's retaliatory tariffs came into effect in early July.
The two countries have not had formal talks on the trade dispute since early June.
But Fred Bergsten, founding director of the Peterson Institute for International Economics, told CNBC that China would be able to absorb blows more easily than Washington.
But the move drew swift condemnation from USA business lobby groups anxious that tit-for-tat tariffs would start to hamper economic growth. "Given the scope of the products covered, about half of all imports from China are facing tariffs, including consumer goods", Ennis said.
Foreign Ministry spokesman Geng Shuang told a daily news briefing in Beijing that US pressure on trade won't work, and that Beijing has always upheld using dialogue to resolve trade issues. "The cost increases will be passed on to customers, so it will affect most Americans pocketbooks". Administration officials are exploring an additional $200 billion of goods on which tariffs might be imposed. The government will seek public comment on the higher tariffs.
Hearings are scheduled for Aug. 20 to 23 and the comment period has been extended to September 5 from late August, according to Lighthizer's office.