US stocks fell on the news but were not hit almost as hard as in Shanghai, where shares closed 1.78 percent lower and the yuan weakening toward last week's 11-month lows.
The abrupt escalation is "totally unacceptable", said a Commerce Ministry statement.
"China is forced to strike back to safeguard core national interests and the interests of its people", the Commerce Ministry said.
"Concerns over trade and trade wars are really having an adverse effect, less so on the USA markets than the worldwide markets, but it is certainly taking a bite".
"NATO has not treated us fairly but I think we'll work something out", Mr Trump told reporters on the White House lawn, adding "we pay far too much, and they pay far too little ..."
It also includes consumer goods ranging from auto tyres, furniture, wood products, handbags and suitcases, to dog and cat food, baseball gloves, carpets, doors, bicycles, skis, golf bags, toilet paper and beauty products.
"Unfortunately the markets haven't come to grips with the current levels of trade policies and tariffs", said Art Hogan, chief market strategist at B. Riley FBR in NY. That would leave China only $80 billion for further retaliation.
"Tonight's announcement appears reckless and is not a targeted approach", said Senate Finance Chairman Orrin Hatch in a statement.
The US was expected to impose new tariffs targeting around $US16b in Chinese goods this week, and China had been expected to respond with similar duties.
Trump scolds NATO members days ahead of summit
While these countries have been increasing their contributions since I took office, they must do much more . Much of the rest of Trump's foreign policy is equally freaky .
In Beijing, Li Chenggang, assistant minister at China's Commerce Ministry, said at a forum in Beijing that the latest USA proposals interfered with the globalisation of the world economy and that China's support for a multilateral trade system would not change.
"But we believe none of these moves are realistic or productive.the wisest move in our view is for China to accelerate the opening of its market rather than continue to trade blows with the United States".
"China has no option but to fight fire with fire".
But the mood on Wall Street is darkening, with analysts increasingly warning of the potential impact on financial markets as the world's two largest economies square off.
Stock markets in Asia fell sharply during early trading on Wednesday amid the escalating trade tension between the two economic giants.
The euro was flat at $1.1675 after shedding 0.6 per cent on Wednesday.
Following the introduction of reciprocal tariffs on $34 billion of the others imports on Friday, the USA, as promised, has announced a new list of 6,000 Chinese goods, totaling $200 billion, that may be hit with additional 10% tariffs by the end of next month.
The new list published on Tuesday targets many more consumer goods than those covered under the tariffs imposed last week, raising the direct threat to consumers and retail firms.