Updated at 5:18 p.m. ET
President Trump on Friday announced higher tariffs on goods from China, hours after Beijing said it will slap tariffs on $75 billion of autos and other U.S. goods. Earlier in the day, he "ordered" U.S. companies to stop doing business with China though it was unclear whether he had the power to do that.
Trump tweeted that starting Oct. 1, $250 billion worth of goods from China currently being taxed at 25% will face tariffs of 30%. And, starting Sept. 1, $300 billion worth of other goods will be subject to tariffs of 15% — up from the 10% previously announced.
Trump's announcement came after the stock market closed.
U.S. stock markets fell sharply after Trump's earlier tweets threatening to respond to China's latest tariffs. The Dow Jones Industrial Average closed down 623 points, or about 2.4%. The S&P 500 dropped about 2.6%, and the Nasdaq composite fell 3%.
Friday's tit-for-tat announcements mark an escalation in a trade war that has rippled through the world economy and raised fears of a U.S. recession.
The first batch of China's tariffs on U.S. goods will go into effect Sept. 1, and a second, on autos and auto parts, is due to go into effect Dec. 15. The tariffs range from 5% to 25%.
"My only question is, who is our bigger enemy, Jay Powell or Chairman Xi?" Trump tweeted earlier Friday, referring to the Federal Reserve chairman, whom he has been urging to cut interest rates, and Chinese leader Xi Jinping.
Trump tweeted the United States has "stupidly" lost trillions of dollars to China over the years, citing the theft of intellectual property. "We don't need China and, frankly, would be far better off without them," he said.
Trump said U.S. firms doing business with China should look elsewhere.
"Our great American companies are hereby ordered to immediately start looking for an alternative to China, including bringing your companies HOME and making your products in the USA," he said.
It was unclear what Trump could do to force U.S. companies to make such a move.
"The president has no authority to order companies to pull out of China," said Jennifer Hillman, a professor at the Georgetown Law Center. "Those companies have already invested in China for reasons that they chose to go into China."
China's Finance Ministry called the new tariffs "a forced move to deal with U.S. unilateralism and trade protectionism."
Last September, China set tariffs on $60 billion in U.S. goods in retaliation for U.S. duties.
The $75 billion in goods affected by China's latest tariffs would represent more than 60% of the $120.3 billion worth of U.S. goods exported to China last year.
U.S. and Chinese negotiators are due to meet in September for a new round of trade talks but have not confirmed a date.
NPR's Emily Feng and Jim Zarroli contributed to this report.