The trade war between the U.S. and China escalated further Friday as Beijing announced a new set of tariffs on American products, sending the stock market plunging.

The China State Council announced it would impose tariffs ranging from 5% to 10% on an additional $75 billion in U.S. goods, according to state media outlet Global Times.

The new tariffs are poised to go into effect in stages, with the first round beginning Sept. 1 and the second Dec. 15. China's Commerce Ministry said 5,078 products would be affected, including soybeans, fruit and seafood Sept 1. and coffee, cars, auto parts, chemicals, whiskey, cigars, clothing and TVs Dec. 15.

This development comes after President Donald Trump earlier this month announced a new round of 10% tariffs on $300 billion in Chinese imports, also on those dates, largely targeting consumer products such as cellphones, laptops, clothing, footwear and toys.

Reacting to the new Chinese tariffs, Trump vowed a U.S. response and "hereby ordered" U.S. companies to "start looking for an alternative to China."

The Dow, Nasdaq and Standard & Poor's 500 finished the day with drops of over 2%

The Dow Jones industrial average fell 623.34 points, or 2.4%, to finish at 25,628.90 on Friday. The Nasdaq dropped 239.62 points, or 3%, to 7751.77, while the Standard & Poor's 500 stock index slid 75.84 points, 2.6%, to 2847.11.

The two sides have so far failed to reach an agreement on a comprehensive trade pact.

"The tariffs themselves aren’t a big economic deal. They’re not going to sink our economic ship, but it does highlight that this war is ongoing and steadily escalating," said Mark Zandi, chief economist at Moody's Analytics. "And if this shot isn’t the one that sinks the ship, if this continues, a shot down the road could be the one."

Tariffs on U.S. goods exported to China could make it more expensive for Chinese consumers to purchase American items and hurt sales for the American companies.

Trump's latest China tariffs:How they affect the economy

Conversely, tariffs on Chinese products exported to the U.S. could increase prices for American consumers and hurt sales for the Chinese companies.

"China has ammunition to fight back. The US side will feel the pain," Global Times editor-in-chief Hu Xijin said Friday on Twitter.

Trump said on Twitter that "our great American companies are hereby ordered to immediately start looking for an alternative to China."

"Our Country has lost, stupidly, Trillions of Dollars with China over many years. They have stolen our Intellectual Property at a rate of Hundreds of Billions of Dollars a year, & they want to continue. I won’t let that happen!" he tweeted.

The most immediate effect on the economy is "the uncertainty generated by this move," Zandi said.

"Business people are tearing their hair out because they can’t figure out which products have tariffs, how big are the tariffs, which countries will the tariffs be on, how long will they be in place," he said.

Contributing: Paul Davidson

Follow USA TODAY reporter Nathan Bomey on Twitter @NathanBomey.