US President Donald Trump has told his officials to consider an additional $100 billion in tariffs against China.
A statement released by the White House on Thursday night said China's retaliation to the first round of US tariffs was "unfair" and would harm American farmers and manufacturers.
China responded by saying it did not want a trade war, but was not afraid of one, and that the trade conflict had been provoked by the United States.
The country's Ministry of Commerce said in a statement on its website on Friday that it would “take new comprehensive measures to safeguard the country's interests if the United States sticks to its protectionist behaviour”.
Trump said the $50 billion of tariffs he previously authorised had been justified by “China’s illicit trade practices”.
Negotiations continue between the two countries behind the scenes amid fears the tariffs could have an impact on the global economy.
"This is what a trade war looks like, and what we have warned against from the start," said Matthew Shay, president of the National Retail Federation.
"We are on a dangerous downward spiral and American families will be on the losing end," he added in a statement.
But Asian markets flitted in and out of positive territory on Friday, suggesting investors were not necessarily concerned by the latest developments.