It labeled the move "extreme pressure and blackmail", and said it would retaliate with counter measures.
China had offered to ramp up purchases of American goods by $70 billion to help cut its yawning trade surplus with the United States, whereas Trump had demanded a $200 billion deficit cut.
The spat between the two economic superpowers is already being felt in China. The yield on the US 10-year Treasury fell to 2.89 percent from 2.92 percent.
"Although many think this might be another bluff from Trump, markets are likely to stay nervous to trade-related headlines for now". That would leave less than $100 billion in USA goods to subject to a tariff hike, far short of the $200 billion Trump is threatening.
Worries about a growing U.S.
The Trump administration also has threatened a tariff hike on another $100 billion of imports in its parallel dispute over Beijing's trade surplus, though it has yet to say when that might take effect.
"Our sense is that President Trump believes the Chinese have little latitude to retaliate given the current trade disparity, but Beijing could employ peripheral policies beyond tariffs that serve to further escalate tensions between the two countries", Boltansky and Davaz wrote in a note to clients.
The United States and China have the world's biggest trading relationship but official ties are increasingly strained over complaints Beijing's technology development tactics hurt American companies.
Beijing could also seek to make life hard for big United States companies that rely on the Chinese market for a big chunk of their revenue.
After all, the U.S. sells much less to China than the other way around.
Trump said on Monday he had asked the US Trade Representative to target $200 billion worth of imports for a 10 percent levy, citing China's "unacceptable" move to raise its own tariffs. A counter punch was swift in coming, with a statement from Beijing on Friday night that it would "strike back forcefully".
Asked to comment on Pompeo's remarks, the Chinese foreign ministry in Beijing said in a regular briefing with reporters that the USA had lost credibility as a free trader.
"This is a trade dispute - nothing more, nothing less", Mr Navarro said.
"President Donald Trump's unwillingness to back down became apparent this morning, once again sinking markets into a risk-off atmosphere", Jingyi Pan of IG said in a report. The bipartisan measure, part of a defense bill, passed 85-10 and came two days before Trump was to host Republican members of Congress to discuss ways that would allow ZTE to survive.
"After the legal process is complete, these tariffs will go into effect if China refuses to change its practices, and also if it insists on going forward with the new tariffs that it has recently announced", Mr Trump said.
Derek Scissors, a China scholar at the American Enterprise Institute, a Washington think tank, spelled out the reality of the situation when he said that Beijing has almost exhausted United States imports to target.