US President Donald Trump has instructed officials to consider a further $100bn (£71.3bn) of tariffs against China, in an escalation of a tense trade stand-off.
These would be in addition to the $50bn worth of US tariffs already proposed on hundreds of Chinese imports.
The proposal comes after China retaliated to that by threatening tariffs on 106 key US products. The tit-for-tat moves have unsettled global markets in recent weeks.
Analysts have said a full blown trade war between the US and China would not be good for the global economy or markets – and that ongoing behind-the-scenes negotiations between the two giants were crucial.
But market reaction in Asia trade on Friday suggested investors were not too troubled by the latest twist, and that trade war fears were somewhat exaggerated.
In China, Hong Kong’s Hang Seng was in positive territory, up 1.3%. Japan’s benchmark Nikkei 225 was also trading higher in the afternoon session.