But the US action drew a swift reaction from the plastics and petrochemical industries, with the head of the Plastics Industry Association saying the tariffs would "boomerang" and hurt manufacturing.
United States officials released a list of thousands of Chinese imports the administration wants to hit with the new tariffs, including hundreds of food products as well as tobacco, chemicals, coal, steel and aluminum.
President Donald Trump has threatened higher tariffs on more than $500 billion of goods, or almost all of China's annual exports to the United States.
TRT World's Kevin McAleese reports from Washington DC.
More than 6,000 items could be affected - including burglar alarms, auto tyres, handbags, baseball gloves, carpets, toilet paper, dog food, and hundreds of food products.
Investor confidence started to return early this week amid a momentary lull in the trade war, following Beijing's retaliation tariffs on USA imports last week after Trump hit China with a 25 per cent tariff worth $34bn on imports.More news: Murdoch's 21st Century Fox ups Sky bid to beat rival Comcast
Pushing past 112 "would suggest the market is bullish on the dollar irrespective of the trade war", said Boris Schlossberg, managing director of FX strategy at BK Asset Management. Hearings on the proposed measures are scheduled to take place in late August.
"China is forced to strike back to safeguard core national interests and the interests of its people", the Commerce Ministry said.
Beijing's lopsided trade balance with the United States means it will quickly run out of imports for retaliation. "This irrational behavior is unpopular".
"At the initial announcement the loonie rallied quite sharply, but throughout the day it lost that momentum and is now down on the day as pressures from the weakening stock market, commodity prices and trade tensions increasing have put further pressure on it".
The London FTSE 100 dropped 1.2 per cent, while the Dow Jones Industrial Average was down almost 0.6 per cent in early trading.
Trump said last week the United States may ultimately impose tariffs on more than $500 billion worth of Chinese goods - roughly the total amount of US imports from China a year ago.
The new list of goods to face 10 percent punitive duties includes frozen meats, live and fresh fish and seafood, butter, onions, garlic and other vegetables, fruits, nuts, metals, and a massive list of chemicals, as well as tires, leather, fabrics, wood and papers. "If the Americans can not export to China, they will look for markets in Canada - Europeans will look at the other markets, and all of a sudden Canada will be damaged".
The move drew immediate condemnation from Senate Finance Chairman Orrin Hatch, a Republican from Utah, who called it "reckless" and not "targeted".