Beijing said Monday that it will raise tariffs on roughly $60 billion worth of US goods on June 1.
The move follows Friday's increase in US tariffs on $200 billion worth of Chinese exports from 10% to 25%.
The Trump administration, which has accused China of backtracking on previous trade commitments, sought to turn up the pressure on Beijing after months of talks failed to produce a breakthrough.
But it's not clear whether the return of tit-for-tat penalties will push Beijing toward a deal.
US and Chinese negotiators ended another round of talks on Friday without a deal to resolve American concerns on market access and intellectual property theft.
It's up in the air when they'll meet again. Larry Kudlow, President Donald Trump's top economic adviser, said Sunday there is a "strong possibility" Trump will meet Chinese President Xi Jinping at the G20 economic summit in Japan next month.
Meanwhile, the Trump administration has begun the process to apply tariffs of 25% to the remaining $300 billion worth of goods China exports to the United States.
High stakes
The trade dispute, which began last July, has hurt Chinese exporters, damaged some US companies and farmers and slowed global growth.
The latest actions are poised to make things worse. Experts have said that tariff hikes could hit growth in both economies, and that Beijing may be forced to step in with new stimulus measures.
Global markets have also been whipsawed by the trade fight. The Dow on Monday fell by more than 500 points.
Last week, the S&P 500 and the Nasdaq posted their worst weekly drops since December, while the Dow had its worst week since March. Analysts fear there could be worse to come if the trade war escalates further.
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