***Article first published by 'Reuters' on June 18, 2018***

WASHINGTON/BEIJING (Reuters) - China has underestimated U.S. President Donald Trump’s resolve to impose more tariffs unless it changes its “predatory” trade practices, a White House trade adviser said on Tuesday, as Trump greatly expanded the amount of Chinese imports possibly facing new duties.

The growing trade conflict hit financial markets hard, with Beijing accusing the United States of “extreme pressure and blackmailing” and vowing to retaliate. With both sides upping the ante, the risks of a damaging trade war grew dramatically.

Trump threatened on Monday to hit $200 billion of Chinese imports with 10 percent tariffs if Beijing retaliated against his previous targeting of $50 billion in imports, aimed at pressuring China to stop stealing U.S. intellectual property.

He also threatened tariffs on another $200 billion of Chinese products should Beijing hit back again, bringing to $450 billion the potential amount of Chinese exports that could be targeted. That sum approaches the roughly $500 billion in total annual Chinese exports to the United States.

White House trade adviser Peter Navarro, who views China as a hostile economic and military power, said Beijing had more to lose from a trade war. China imported $129.89 billion of U.S. goods last year, while the United States purchased $505.47 billion of Chinese products, according to U.S. data.

“The fundamental reality is that talk is cheap,” Navarro told reporters on a conference call, saying China “may have underestimated the strong resolve of President Donald J. Trump.”

“If they thought that they could buy us off cheap with a few extra products sold and allow them to continue to steal our intellectual property and crown jewels, that was a miscalculation,” Navarro said, referring to now-abandoned talks in which Beijing had offered to purchase more U.S. products.

The trade confrontation pits the world’s two largest economies against each other and could disrupt global supply chains for the tech and auto industries, sectors heavily reliant on outsourced components.