Beijing: China has threatened to hit back against Donald Trump's new tariffs, saying on Friday it was not afraid of a trade war, and releasing a detailed list of 128 US products that it planned to target.

The goods identified by the country's Commerce ministry for potential new tariffs are worth $US3 billion ($A3.9 billion) and come in response to Trump's earlier steel and aluminium tariff announcement, suggesting the retaliation can only escalate from here.

Presidents Xi and Trump in Beijing last year. AP

On the list is US wine, fruit and nuts, ethanol, ginseng and steel pipes, all of which would be hit with a 15 per cent tariff, while aluminium scrap and pork would be hit with a 25 per cent tariff.

Also on the list were fresh American citrus, raisins and apples, frozen berries and dried fruits, which are commonly seen in Chinese supermarkets in major cities.

The Trump Administration announced overnight it would impose new tariffs worth $US60 billion ($A78 billion) on Chinese goods – targeting technology products – restrict Chinese investments, and would file a WTO case.

Mr Trump said there was a trade deficit of $504 billion and ‘‘a tremendous intellectual property theft situation going on’’.

The commerce ministry toughened its rhetoric in response, saying the US "disregards China’s efforts to strengthen the protection of intellectual property rights, ignoring WTO rules, and disregarding the voices of the broad masses of the industry.

"It is a typical unilateralism and trade protectionism. China firmly opposes it."

"China does not want to fight a trade war, but it is absolutely not afraid of a trade war. We are confident and capable of meeting any challenge. It is hoped that the US side will be able to make a swift decision and not to drag bilateral economic and trade relations into danger."

A strongly worded statement from the Chinese embassy in Washington late on Thursday said Beijing does not want a trade war but will not recoil from one and "would fight to the end ... with all necessary measures".

"We will retaliate. If people want to play tough, we will play tough with them and see who will last longer," Chinese ambassador Cui Tiankai said in a video posted to the embassy's Facebook page.

Stocks fell sharply on Trump's announcement, with the Dow Jones Industrial Average falling nearly 3 per cent. Major industrials that could become targets of Chinese trade retaliation slumped further, with aircraft maker Boeing down 5.2 per cent and earthmoving equipment maker Caterpillar falling 5.7 per cent.

Mr Trump signed a memorandum imposing the restrictions after a Section 301 investigation found Chinese violations of technology intellectual property rights.

He said he had spoken to the China's President Xi Jinping and asked him to reduce the trade deficit by $100 billion immediately and he was ‘‘in the midst of a very large negotiation’’ with Beijing.

"I view them as a friend" Trump said of the Chinese as he started his announcement. "We have spoken to China and we are in the middle of negotiations."

The US action will target key areas identified in China’s ‘‘Made in China 2025’’ program, including electronics, robotics, aviation and aerospace products, Trump advisor Peter Navarro told reporters.

President Donald Trump announced preparations for new tariffs on China, this time focusing on the technology sector, as he looks to make good on his campaign pledge to shake up the global trading system.

There are fears the move would trigger a trade war between the world’s number one and number two economies.

China’s commerce ministry said before Trump's announcement that China firmly opposed US acts of unilateralism and trade protectionism.

‘‘China will never sit idly and let its lawful rights and interests be undermined and will surely take all necessary measures to firmly safeguard its legitimate rights and interests,’’ said Chinese foreign ministry spokeswoman Hua Chunying.

She said China hoped the US would ‘‘refrain from moves that will hurt both itself and others’’.

Before the Trump announcement, China’s ambassador to the WTO, Zhang Xiangchen, said China was considering a WTO complaint against the expected package of tariffs, but that was only one option.

At a press conference earlier on Thursday, Hua highlighted key US exports to China but declined to say whether these would be likely targets for retaliatory action.

‘‘China’s market receives the largest number of US planes and soybeans and the second largest number of US cars and cotton. The figure I saw is that 62 per cent of US soybeans and 25 per cent of its Boeing planes ended up in China.’’

She said the US side had complained about the need for ‘‘fairness’’ and ‘‘reciprocity’’ in trade, but China believed the trade imbalance between the two countries was partly the result of US policies restricting exports to China.

‘‘The US is on the one hand urging China to buy what it wants to sell, while refusing to sell what China wants to buy. Is the US in the right position to criticise China on trade imbalance? Is it fair? How many toys do we have to sell to equal the value of one Boeing plane?’’

Asked if China would retaliate to US tariffs by hitting US sales of soybeans and Boeing aircraft to China, Hua said China’s trade department handled the issue.

Chinese premier Li Keqiang said earlier this week that China wanted the US to ease restrictions on the sale of hi-tech goods to China to help rebalance trade.

In a speech on Tuesday Li said China would improve conditions for foreign companies in China, bringing down overall tariffs for imports, slash tariffs for day-to-day consumer goods and would eliminate tariffs for drugs.

Manufacturing would be opened up to foreign investors with no requirement for technology transfer, Li said, addressing a long-time sore point for foreign companies.

Market access to aged care, education and healthcare and financial services sectors would be widened, and limits on foreign equity lifted in some areas.

But American and European business have long complained about a lack of action on reform, despite pledges that China would continue to open up its markets.

With Reuters