China announces new reciprocal tariffs on 106 US products

The USTR's proposed list will undergo further review in a public notice and comment period, including a hearing. After completion of the process, the USTR will issue a final determination on the products subject to the additional duties.

"The tariffs will mostly increase the price of intermediate goods and hurt US manufacturers who are supposed to be the beneficiaries of Trump's trade policies. It does not seem well thought through," said Edward Alden, a senior fellow at the Council on Foreign Relations.

Trump said on Tuesday before the announcement that the US will be working with China. "Our relationship is very good with China. We intend to keep it that way. But we have to do something to seriously relieve that trade deficit," he said, repeatedly mentioning a bilateral trade deficit of $500 billion.

The US trade deficit with China, however, was $375 billion, according to US data, and $275 billion according to Chinese data.

Most economists believe the bilateral trade deficit does not matter, and the US trade deficit is a result of its own fiscal policies and the role of the US dollar as a global currency.

The Trump administration tax-reduction plan, which went into effect in February, is expected to drive up the US trade deficit.

A Deutsche Bank Research report last week pointed out that the US-China trade imbalance is misleading because it includes only trade but not the sales generated through US subsidiaries based in China, which reached $223 billion in 2015 and are rising.