Trump hits China with tariffs worth dollar 60 billion

"We're doing things for this country that should have been done for many, many years," The Washington Post quoted the President as saying at the White House on Thursday.

"We have a tremendous intellectual property theft problem... It's going to make us a much stronger, much richer nation," Trump added.

The announcement follows a seven-month government investigation into the intellectual property theft, which has been a longstanding point of contention in US-China trade relations, CNN reported. 

In addition to the tariffs, the US also plans to impose new investment restrictions, take action against China at the World Trade Organisation and the Treasury Department also will propose additional measures.

Trump directed Trade Representative Robert E. Lighthizer to propose within 15 days tariff increases designed to compensate the US for lost profits and jobs. 

After a 30-day comment period, the list, targeting Chinese products that benefited from US technology, will be made public.

But even as he confronted China over technology, Trump weakened a new tariff meant to protect US production of industrial metals, potentially exempting the European Union, Brazil and other countries accounting for two-thirds of steel imports and more than half of foreign-made aluminium, The Washington Post reported.

Thursday's announcement sent stocks to their biggest one-day drop in six weeks. 

On Wall Street, the benchmark Dow Jones industrial average plunged more than 700 points, or almost 3 per cent, as investors blanched at the prospect of a trade war between the world's two largest economies.

Meanwhile, the Chinese government fired back on Friday, threatening to impose tariffs on $3 billion worth of US imports, including pork, wines and steel pipes. 

Trump's announcement was "typical unilateralism and protectionism", China's Commerce Ministry said in a statement, and it had set a "very bad precedent".

"China does not want to fight a trade war, but it is absolutely not afraid of a trade war," the ministry said. 

"We are confident and capable of meeting any challenge. It is hoped that the U.S. side will be able to make a swift decision and not to drag bilateral economic and trade relations into danger."

The ministry however, did not specify a deadline for imposing the tariffs.

Ahead of Trump's announcement, China's Premier Li Keqiang had warned: "A trade war does no good to anyone. There is no winner," CNN reported.

Trump, on March 8, signed proclamations to impose a 25 per cent tariff on imported steel and a 10 per cent tariff on aluminium, causing mounting dissent among business groups and trading partners around the world.

Trump had exempted Canada and Mexico from the import levies for the duration of talks aimed at renegotiating the North American Free Trade Agreement.