US President Donald Trump yesterday hit China with tariffs on up to $60 billion of imports to retaliate against the "theft" of American intellectual property, ratcheting up trade tensions between the world's two largest economies.
Saying it would be the "first of many" trade actions, Trump signed the order that also could result in restrictions on Chinese investment in the US.
The move sent stocks diving amid rising market fears the US could provoke a trade war, since China has vowed to retaliate.
But at the same time Washington also said it would at least temporarily exempt the European Union and six other countries from steep steel and aluminium tariffs announced this month, easing the immediate threat of a trade dispute with US allies.
"We have a tremendous intellectual property theft situation going on," Trump said as he signed the new trade order.
Senior White House Economic Adviser Everett Eissenstat said the new import duties would target industrial sectors where "China has sought to acquire an advantage through the unfair acquisition or forced technology transfer from US companies."
US Trade Representative Robert Lighthizer within two weeks is due to publish a list of the products that will be slapped with tariffs.
Vice President Mike Pence hailed the new measures as just one more "promise made and a promise kept by president Trump."
The new action "makes it clear the era of economic surrender is over," Pence said.
On Wall Street, the Dow Jones Industrial Average was down about two percent ahead of the announcement, but recovered some losses shortly after 1800 GMT.
The new order directs the US Treasury to develop new proposals to increase safeguards on Chinese investments in the US that could compromise national security.