China will levy tariffs on about $US60 billion ($83 billion) worth of American goods in retaliation for new US tariffs, as previously planned, but has reduced the volume of tariffs that it will collect on the products.

Key points: Donald Trump says the US will impose 10 per cent tariffs on $US200 billion worth of Chinese imports

Donald Trump says the US will impose 10 per cent tariffs on $US200 billion worth of Chinese imports China says it will retaliate with tariffs on about $US60 billion of US goods

China says it will retaliate with tariffs on about $US60 billion of US goods Mr Trump had warned China of further tariffs if it retaliated

The tariff rates will be levied at 5 and 10 per cent, instead of the previously proposed rates of 5, 10, 20 and 25 per cent, the Finance Ministry said on its website late on Tuesday.

China will impose a 10 per cent tariff on US products it previously designated for a rate of 20 and 25 per cent.

Liquefied natural gas (LNG), for example, was previously under the 25 per cent tariff category but now will be subject to a tariff of 10 per cent.

The tit-for-tat measures are the latest escalation in an increasingly protracted trade dispute between the world's two largest economies.

China earlier warned it would have no choice but to retaliate after US President Donald Trump announced he will impose 10 per cent tariffs on $US200 billion worth of Chinese imports.

China's Finance Ministry said its tariff increases were aimed at curbing "trade friction" and the "unilateralism and protectionism of the United States".

There was no word on whether China would back out of trade talks it said it was invited to by the US, but a Chinese Commerce Ministry statement said the US increase "brings new uncertainty to the consultations".

Mr Trump had warned on Monday that if China took retaliatory action against US farmers or industries, "we will immediately pursue phase three, which is tariffs on approximately $267 billion of additional imports".

Collection of tariffs on the long-anticipated list will start on September 24, but the rate will increase to 25 per cent by the end of this year.

This will allow US companies some time to adjust their supply chains to alternate countries, a senior administration official said.

Apple and Fitbit spared for now

Apple and Fitbit watches were spared in the latest US tariff hike. ( Unsplash: Andres Urena, CC0 )

The latest US duties spared smart watches from Apple and Fitbit and other consumer products such as baby car seats.

But if the administration enacts the additional tariffs, it would engulf all remaining US imports from China, and Apple products like the iPhone and its competitors would not likely be spared.

Last month, China unveiled a proposed list of tariffs on $60 billion of US goods ranging from liquefied natural gas to certain types of aircraft — should Washington activate the tariffs on its $200 billion list.

China is reviewing plans to send a delegation to Washington for fresh talks in light of the US action, the South China Morning Post reported on Tuesday, citing a government source in Beijing.

So far, the United States has imposed tariffs on $50 billion worth of Chinese products to pressure Beijing to reduce its huge bilateral trade surplus and make sweeping changes to its trade, technology transfer and high-tech industrial subsidy policies.

Beijing has retaliated in kind, but some analysts and American businesses are concerned it could resort to other measures, such as pressuring US companies operating in China.

A senior Chinese securities market official said US trade actions will not work as China has ample fiscal and monetary policy tools to cope with the impact.

The government already has been ramping up spending on infrastructure.

"President Trump is a hard-hitting businessman, and he tries to put pressure on China so he can get concessions from our negotiations. I think that kind of tactic is not going to work with China," Fang Xinghai, vice chairman of China's securities regulator, said at a conference in the port city of Tianjin.

US move has 'poisoned' the atmosphere

The United States has so far imposed tariffs on $50 billion worth of Chinese products. ( AP: Chinatopix )

Mr Trump's latest escalation of tariffs on China comes after several rounds of talks yielded no progress.

US Treasury Secretary Steven Mnuchin last week invited top Chinese officials to fresh discussions, but thus far nothing has been scheduled.

"We have been very clear about the type of changes that need to be made, and we have given China every opportunity to treat us more fairly," Mr Trump said in a statement.

"But, so far, China has been unwilling to change its practices."

Mr Fang told the Tianjin forum that he hopes the two sides can sit down and talk, but added that the latest US move has "poisoned" the atmosphere.

So far, China has either imposed or proposed tariffs on $110 billion of US goods, representing most of its imports of American products.

"Tensions in the global economic system have manifested themselves in the US-China trade war, which is now seriously disrupting global supply chains," the European Union Chamber of Commerce in China said in a statement on Tuesday.

China's yuan currency slipped against the dollar on Tuesday after news of the US measures. It has weakened by about 6.0 percent since mid June, offsetting the 10 per cent tariff rate by a considerable margin.

ABC/Reuters