By Agencies

The US president's move is seen as a direct shot in a brewing trade war between the world's two biggest economies.

US President Donald Trump has signed an order that paves the way for imposing tariffs on as much as $60bn worth of Chinese goods imports.

The move on Thursday is seen as a direct shot in a brewing trade war between the world's two biggest economies. 

Saying it would be the "first of many" trade actions, Trump said the measure was aimed at punishing Beijing over the alleged theft of US technology and Chinese pressure on American companies to hand it over.

"We have a tremendous intellectual property theft situation going on," Trump told reporters.

The White House said that Trump would direct the Office of the US Trade Representative (USTR) to publish a detailed product list of proposed tariffs within 15 days. USTR has already identified potential targets: 1,300 product lines worth about $48bn.

The president is also asking Treasury Secretary Steven Mnuchin to come up with a list of restrictions on Chinese investment.

Referring to the US' $375bn trade deficit with China, which he blamed for the loss of American jobs, Trump said: "It is the largest deficit of any country in the history of our world. It is out of control."

Beijing has already warned that it will take "all necessary measures" to defend itself, raising the prospect of a trade war between the two economic powerhouses.

Stocks plummet

The new import duties will target industrial sectors where "China has sought to acquire an advantage through the unfair acquisition or forced technology transfer from US companies," senior White House economic advisor Everett Eissenstat told reporters.

The products subject to the new tariffs have not yet been identified.

But the move sent stocks diving on Wall Street, where the Dow Jones Industrial Average was down about two percent in the face of the announcement and ratcheted up Trump's confrontational stance with trading partners.

Trump will direct US Trade Representative Robert Lighthizer to identify and publish a proposed list of products that could be subject to tariffs.

He will also direct Lighthizer to take action against China at the World Trade Organization, charging Beijing with preventing US companies from licensing their technology in China.

The measure also directs the US Treasury to develop new proposals to increase safeguards on investments that could compromise US national security.

Steel and aluminium tariffs

The move against China comes just as the US prepares to impose tariffs of 25 percent on imported steel and 10 percent on aluminium - sanctions that are meant to hit China for flooding the world with cheap steel and aluminium.

But Lighthizer said on Thursday that Europe, Australia and South Korea are among a significant list of trading partners to be initially exempt from new US tariffs on foreign steel and aluminium.

Testifying to the Senate Finance Committee, US Trade Representative Robert Lighthizer said that Trump has decided to "pause the imposition of the tariffs" while negotiating with a "list" of additional countries.

"We have Europe, we have Australia, we have Argentina, we have Brazil, who am I forgetting? And obviously, Korea, where we're negotiating, of course," Lighthizer said.

While signing off on the tariffs against China, Trump insisted the country was still a "friend".

"I have tremendous respect for President Xi (Jinping)," Trump said, trying to limit the fallout. "We have a great relationship."

"I view them as a friend," he added.