Beijing's increases include an additional 25 percent tariff on cars imported from the United States, raising the total charge to 40 percent.
China also seems to be projecting confidence that it can withstand political turmoil, said David Rank, former deputy chief of mission at the U.S. Embassy in Beijing.
"Tariffs on $200 billion in Chinese products amounts to another multibillion-dollar tax on American businesses and families", said Scott Lincicome, a trade lawyer and senior policy analyst for the group Republicans Fighting Tariffs.
"Rather than address our legitimate concerns, China has begun to retaliate against U.S. products".
Wall Street shares had gained for the past few sessions, enjoying a lull from the trade war fears that lashed global markets last week.
The new sanctions follow 25 percent tariffs worth $34 billion (£25.6 million) which were imposed last week.
Prior to the first round of U.S. tariffs against China, UBS said negotiations between the two countries looked promising.
Meanwhile, US Senator Orrin Hatch, Chairman of the Senate Finance Committee called the move "reckless".
The U.S. Chamber of Commerce has supported Trump's domestic tax cuts and efforts to reduce regulation of businesses, but it has been critical of Trump's aggressive tariff policies.
Robert Holleyman, the USA official in charge of trade with Asia during former president Barack Obama's second term, described the tariffs as "tax hikes on US imports".
The Retail Industry Leaders Association said new tariffs on Chinese imports would punish American families by driving up prices. "Unfortunately, China has not changed its behaviour".
The Office of the US Trade Representative is seeking submissions on the latest proposed tariffs and will conduct hearings in late August, making September the earliest possible implementation date for the new import taxes.
"In part because they have only limited ammunition and in part because it's still early in the process on the US side", Kuijs said. "This new round of proposed tariffs takes the fight onto yet another level from which it is going to be hard for either side to make a graceful retreat", said Eswar Prasad, former head of the International Monetary Fund's China division.
In Beijing, Li Chenggang, assistant minister at China's Commerce Ministry, said that the latest USA proposals would hurt both countries and pointed to declines in Chinese export growth and overseas investment to the United States in the first half of this year.