China fired back with its own warning and said it would impose duties on $60 billion of U.S. goods.
To compensate for the gap on its tariff list caused by the exclusion of crude oil, China added fish meal, wood waste, paper and paper waste, metal scraps, and various types of bicycles and cars, among other products.
Americans import far more from China than the other way around, however, meaning Beijing may at some point need to look for other means of retaliation.
Beijing said last Friday it would impose tariffs ranging from 5 per cent to 25 per cent on US$60 billion worth of American products. The markets will turn weaker if the tariff damage starts to show up in USA inventories numbers, but since Chinese refiners had been limited buyers since early July, it may not show up in the numbers for weeks.
USTR is conducting a public comment period for those tariffs, which could reach 25 percent, due to end September 5. President Donald Trump has suggested he may tax effectively all imports of Chinese goods, which reached more than $500 billion previous year.
At the same time, Beijing reported a $28.1bn trade surplus with the United States in July, just below the record $28.9bn seen in June. That was off slightly from June's 13.6% rate but still stronger than China's global export growth.
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Canada also imports $2.6 billion in goods from Saudi Arabia, with the overwhelming majority being mineral products. The Kingdom will also freeze "all new business" with Canada. .
China's exports grew faster than expected in July, while imports surged, showing both domestic and worldwide demand continue for now to shrug off the uncertainty of the trade conflict with the US.
As the U.S. -China trade spat turns into a full-blown war with tariffs and retaliatory tariffs and threats of further tariffs, U.S. energy exports to China may suffer with Beijing now following through with its threat to slap tariffs on U.S. oil and oil product imports.
Chinese state media has said Beijing will not be cowed by Washington's threats. While there's no major risk of the world lapsing into "damaging stagflation", the possibility remains of a "bigger blow-up" that sharply reduces trade, as in the 1930s, it said. It would likely have to impose penalties on US companies doing business in China to make up the difference. But within days, Trump himself backed away from the deal, saying talks would "probably have to use a different structure".
The Trump administration has accused China of unfair trade practices, and President Donald Trump has long vowed to bring down the United States' trade deficit in goods with Beijing.
Negotiations broke off after the Trump administration imposed the tariffs on $34 billion in Chinese imports, a move the Chinese said would void any promises they'd made in negotiations.