China vowed to take "necessary countermeasures", expressing "deep regret over the development".
It comes as high-level officials from both sides are attempting to salvage a trade deal in Washington.
However, the US leader said that matters are good enough as they stand now and the deal can wait, as "massive payments go directly" to the US Treasury.
China says it hopes the two countries can meet each other halfway and make joint efforts to solve the existing problems through cooperation and consultation.
American officials also want Beijing to reduce subsidies they say violate Chinese free-trade pledges and to narrow its multibillion-dollar trade surplus with the United States. Worldwide markets seemed to stabilize during the day Friday while Chinese stock markets, after suffering big losses earlier in the week, gained. The president has been very clear we're not going to take it anymore. So instead of making the product, it'll be old fashion way, the way we used to do it.
The tariff was due to rise at the start of the year, but the increase was delayed as negotiations advanced.
For a number of reasons, it can be hard to measure the impact of higher tariffs on consumers prices.
Since previous year, the two economic powerhouses have exchanged tariffs on more than $360bn in two-way trade, gutting U.S. agricultural exports to China and weighing on both countries' manufacturing sectors. Energy companies also fell with the price of oil, as benchmark US crude dropped 0.7% to settle at $61.70 per barrel. You know, we're the piggybank that everybody steals from, including China.
If the two sides fail to reach an agreement, Trump will come closer to decoupling the US and Chinese economies - which he claims will bring blue-collar manufacturing jobs back to the United States.
In a statement, the American Chamber of Commerce in China said it was committed to helping both sides find a "sustainable" solution.
"The reason for the China pullback & attempted renegotiation of the Trade Deal is the honest HOPE that they will be able to 'negotiate" with Joe Biden or one of the very weak Democrats, ' Trump tweeted on Wednesday.
No breakthrough, and no deal - just, more tariffs. Or China could reverse the changes to the text and return the negotiations to where they were a week ago and work toward a deal to be signed at the G20 summit in Japan in June, the source said.
But more than a year later, Mr Liu was in Washington trying to save the deal even as Mr Trump warned that the U.S. would start "paperwork" on another $325 billion in Chinese imports, after raising tariffs on $250 billion of Chinese goods. In this case, it would be the American consumer.
While the prospect of higher tariffs rattled financial markets, investors seemed reassured that talks had not broken down completely.
European markets were down across the board on Thursday, with the Euro Stoxx 50 Pr losing 2% to settle at 3,349.14.
How will the tariff increase affect negotiations?. Lighthizer and Mnuchin have agreed with Liu to continue trade talks on Friday morning, a White House spokesman said on Thursday.
President Trump had strong words for China on the matter earlier this week, but on Friday said the talks are "congenial".
Trump has already suggested that he's ready to bring in more trade penalties if his demands are not met. Chinese officials balked at specifying in the agreement which laws would be amended to address USA concerns over forced technology transfer and intellectual property protection, U.S. officials said.
However, he also said he would be equally satisfied to simply keep tariffs in place.
"Better for China to play the role of conciliatory statesman than angry retaliator".
President Donald Trump said in a tweet that he would be 'very happy with over $100 Billion a year in Tariffs filling USA coffers'. We've been paying China USD500 billion a year for many, many years.
The two sides have already imposed tariffs on billions of dollars worth of one another's goods, creating uncertainty for businesses and weighing on the global economy. I mean, they took - whether it's intellectual property theft, they took many, many parts of that deal and they renegotiated.