Donald Trump has confirmed that he is ready to impose punitive new tariffs on all Chinese goods imported into the US, in what would be a massive escalation of his global trade war.

The US president said in an interview that “I'm ready to go to 500”, a reference to the $505bn of US imports from China in 2017.

The Trump administration is in the process of hitting $50bn of Chinese goods imports with levies in a move it says is spurred by unfair Chinese import barriers and the forced transfer of technology from US firms when they operate in China.

But China has matched the US tariffs, imposing levies on a similar amount of US imports, including soybeans, medical equipment and crude oil.

“I said, ‘You don't match us – you can't match us because we're always going to be behind,” Mr Trump told the CNBC network.

“I'm ready to go to 500. I'm not doing this for politics, I'm doing this to do the right thing for our country. We've been ripped off by China for a long time,” he said.

Earlier this week the IMF warned that a global trade war could wipe up to half a trillion dollars off the global economy, or 0.5 per cent, by 2020 and that financial markets are too complacent about the risk.

Research by the Bank of England suggests that the negative impact could be still larger, reaching 2.5 per cent of global GDP over three years.

Mr Trump is also threatening the European Union, which he calls a “foe”, with more tariffs, after hitting the bloc with 25 per cent levies on steel imports, on the pretext of national security concerns.

On Thursday, EU trade commissioner Cecilia Malmstrröm warned that threatened tariffs on EU car and car part imports would be “disastrous” and that the EU would retaliate with countermeasures, just as it has on steel.

China has said that the US is starting “the largest trade war in economic history”.

Data from the US Census Bureau shows that the US imported $505.5bn of goods from China in 2017, while $129.9bn went the other way, leaving the US with a bilateral trade deficit of $375.6bn.

Economists argue that the current US goods trade deficit is primarily a consequence of total spending in the US exceeding total income, rather than unfair trade arrangements as Mr Trump claims.

They also argue that raising tariffs is unlikely to be effective in cutting the US's overall 2.9 per cent of GDP trade deficit, despite the president's claims, unless the trade war results in a new US recession.