President Donald Trump asked the US Trade Representative consider increasing the proposed tariffs to 25 per cent from the announced 10 per cent, US Trade Representative Robert Lighthizer said.

The Trump administration threatened to raise proposed tariffs on Chinese imports from 10 percent to 25 percent, escalating USA trade tensions with Beijing.

"Regrettably, instead of changing its harmful behavior, China has illegally retaliated against us workers, farmers, ranchers and businesses", he said.

Last month, the US proposed 10 percent tariffs on another $200 billion in Chinese products, a response to China's retaliation.

-China Business Council, said a 10 percent tariff on these products is already problematic, but more than doubling that to 25 percent would be much worse.

Before the tariffs go into effect, they are subject to a public comment period. "If the USA takes measures to further escalate the situation, we will surely take countermeasures to uphold our legitimate rights and interests", spokesman Geng Shuang said at a regular press conference on Wednesday.

China said "blackmail" would not work and that it would hit back if the United States took further steps hindering trade, including applying the higher tariff rate.

China, which has accused the United States of bullying, again vowed to retaliate if Trump proceeds with the measures, warning that pressure tactics would fail.

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But the move drew swift condemnation from US business lobby groups anxious that tit-for-tat tariffs would start to hamper economic growth.

Trump has said in the past that "Trade wars are good and easy to win".

Investors fear an escalating trade war between Washington and Beijing could hit global growth, and prominent USA business groups have condemned Trump's aggressive tariffs.

Wang Yi, the Chinese government's top diplomat, said US efforts to pressure China would be in vain, urging its trade policymakers to "calm down".

What's the story on tariffs on China?

Benchmark U.S. government bond yields edged lower on Thursday as investors sought safe-haven debt while the dollar.DXY rose against a basket of currencies.

The initial set of tariffs and reprisals led to talks between Washington and Beijing, and Trump and his administration touted a deal that they said would lead to hundreds of billions of dollars worth of additional USA exports to China.

Recognizing this dynamic, a policymaker who is serious about reducing the USA trade deficit would at least consider controlling capital inflows to the United States, either by creating regulations that make it more hard for foreigners to invest in the US, or by taxing such investment.