administration last week imposed a 25-percent tariff on a wide range of Chinese products, including automobiles.
The US Trade Representative office will hold hearings on the targeted products and an administration official said it would take about two months to finalise the list, at which point Trump would decide whether to go ahead with the tariffs.
But China has rebuffed United States complaints and denied any harm was done to United States companies, and instead retaliated "without any worldwide legal basis or justification", Lighthizer said. "There is no justification for such action", he said in a statement.
The latest shot in a spiralling trade conflict between the world's top two economies came just days after tit-for-tat tariffs on $34 billion in goods came into effect.
The S&P 500 also fell 0.7 percent and the Nasdaq Composite dropped 0.6 percent.
In currencies, both the yen and the dollar act as safe-haven investments.
President Donald Trump has said he may ultimately impose tariffs on more than $500 billion worth of Chinese goods - roughly the total amount of US imports from China previous year. And American consumers will have to pay the high price because U.S. firms will have to buy them despite the high tariffs.
"USTR will proceed with a transparent and comprehensive public notice and comment process prior to the imposition of final tariffs, as we have for previous tariffs".
The new list of tariff targets from the US Trade Representative includes vacuum cleaners, furniture and vehicle and bicycle parts, but US-branded smartphones and laptops were excluded.
"We can not turn a blind eye to China's mercantilist trade practices, but this action falls short of a strategy that will give the administration negotiating leverage with China while maintaining the long-term health and prosperity of the American economy".
Grassley said the Trump administration tariff fight has "a very detrimental effect on current markets" and that the impact is rippling through other industries in his state beyond agriculture. Imposing taxes on another $200 billion worth of products will raise the costs of every day goods for American families, farmers, ranchers, workers, and job creators.
For instance, a USA cherry producer told The Washington Post this week thata shipment to China was divertedfor further inspection and went bad, resulting in a loss for the U.S. firm.
Stephen Holmes, a spokesman for the Home Depot, said some of the products on the list - like lumber and carpet - won't affect his company because it receives most of those from the USA and Canada.
Although China has announced to retaliate against US tariffs, they might not be able to win the trade war over the long-term.
"The markets still remain sensitive to the trade-related theme, which is something investors have to take into account for the long term", said Yoshinori Shigemi, global market strategist at JPMorgan Asset Management in Tokyo.