China has said it is considering imposing tariffs on $US3 billion worth of US products in retaliation to new tariffs announced by President Donald Trump.
A Chinese worker at a steel mill in Hefei, in eastern China's Anhui province. Photo: AFP
The list of products under consideration by China includes pork, wine, fruit and nuts and stainless steel pipes, among others.
At the same time, China has asked the US to avoid taking US-China trade relations to a "dangerous place".
Beijing said it hoped the US would pull back "from the brink" of a trade war.
That comes after the US announced plans to impose tariffs on up to $60bn on Chinese imports and limit the country's investment in the US.
The move was a response to years of alleged intellectual property theft by China.
China's commerce ministry said it opposed the US action against Chinese imports.
The ministry said it had plans for a 25 percent tariff on US pork imports and recycled aluminium, and a 15 percent tariff on US steel pipes, fruit and wine.
It also said in a statement that while it did not want a trade war, it was not afraid to have one.
Beijing also has plans to pursue legal action through the World Trade Association on US tariffs announced last month against imported steel and aluminium products.
Markets in Asia fell on fears that the US and China were about to embark on a trade war.
The benchmark Nikkei 225 was down close to 4 percent in mid-morning trade, and markets in China were all in negative territory.
NZ keeping a close eye on trade threats
New Zealand's Trade Minister David Parker said the sudden escalation in trade threats was alarming.
"We are taking it very seriously. I think these sorts of situations highlight the importance of having clear and agreed rules for trade.
"We think that's in New Zealand's interests. We don't have a lot of economic muscle born of size so we're reliant on rules-based institutions."
And Prime Minister Jacinda Ardern said New Zealand was closely watching the escalation in trade threats between the US and China.
Ms Ardern said New Zealand would maintain its line that open global trade was a good thing.
"We continue to be a country that benefits hugely from multi-lateral trade agreements that always has argued against situations where we might have tariff wars.
"And so for us - it's all about maintaining that position."
While the China New Zealand Business Council said a trade war would be disruptive and could undermine confidence in global markets.