The White House has threatened China with tit-for-tat tariffs on imported goods after Beijing imposed extra costs on the importation of sport utility vehicles (SUVs) and other large cars from the US.
Commerce secretary John Bryson said a series of breaches by the Chinese this year showed they were ignoring trade rules.
The dispute began after data revealed the Chinese manufacturing sector continued to contract in December, though not by as much as in the previous month.
The HSBC/Markit purchasing managers' index hit 49 after dropping to 47.7 in November. A figure of less than 50 indicates the sector is shrinking.
Capital Economics warned that as long as new orders remained weaker than output and inventories were growing "it is hard to be too optimistic".
China's tariffs, ranging from 2% to 22%, are unlikely to inflict much pain on American carmakers, which generally manufacture most of their cars for the Chinese market inside the country. But the sabre-rattling by the Beijing administration may undermine efforts by the White House to foster an export-driven recovery.
The US has already complained that China has blocked the import of chicken parts and dumped solar panels and steel cylinders in the US in breach of international trade rules.
Bryson said: "The United States has reached a point where we cannot quietly accept China ignoring many of the trade rules. China still substantially subsidises its own companies, discriminates against foreign companies and has poor intellectual property protections."
Bryson, along with US trade representative Ron Kirk, was in China last month to address its concerns on areas ranging from software piracy to agriculture. "But we must see follow-through. We cannot rely just on words. We need timeframes and concrete results. Anything short of that will be unacceptable," Bryson said.
In reponse the Chinese claim that US carmakers benefited from massive bailouts during the banking crash that give them an unfair advantage.
The tariffs are expected to spook European firms Daimler, BMW and Fiat, which owns US carmaker Chrysler. The tariffs could hit them hard, as they produce more of their cars for export on home turf.
China's move comes as the US, increasingly frustrated by a mammoth trade deficit and what it calls unfair treatment of its major companies in China, changes its own tactics. It is building the argument that China's support for state-owned firms violates World Trade Organisation rules. It is concerned that discounted land and electricity prices and loans that can be perpetually rolled over give Chinese firms an unfair advantage.
A WTO appeals panel overturned the first American attempt to apply anti-subsidy measures against Chinese steel, sacks and tyres, but left the door open for a more nuanced case that China subsidises its state-owned sector.
"The US is getting ready to be a lot tougher on China on trade. They are doing a top-to-bottom review in Washington," said James McGregor, senior consultant for APCO Worldwide in Beijing.
"It's going to get at the whole state-owned sector and at subsidies that are hard to quantify."
The Chinese administration is concerned it will come under increasing pressure to open its doors to foreign businesses as western companies look for growth opportunities.
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