WASHINGTON - China announced Monday it will raise tariffs on U.S. LNG to 25 percent, part of a broad retaliation to President Donald Trump's announcement last week he was raising tariffs on $200 billion in Chinese goods.

The escalating trade war between the world's two largest economies sent financial markets reeling, with the Dow Jones Industrial Average down more than 2 percent Monday morning.

The new tariffs come as U.S. LNG exports are fast rising - up to almost 3.7 billion cubic feet a day in February, a more than 35 percent increase over 12 months earlier. Last year China was the fourth largest importer of U.S. LNG, after Japan, South Korea and Mexico, according to the Department of Energy.