"The increase in the possible rate of the additional duty is meant to provide the administration with additional options to encourage China to change its harmful policies and behaviour and adopt policies that will lead to fairer markets and prosperity for all of our citizens", Lighthizer said in a statement.
The drop in the PMI, a key indicator of manufacturing health in the world's second-largest economy, came as Trump's administration proposed a 25 percent tariff on another $200 billion in Chinese goods, up from an earlier 10 percent plan.
Increasing the rates to 25 percent could make them significantly more painful.
"The increase in the possible rate of the additional duty is meant to provide the Administration with additional options to encourage China to change its harmful policies and behavior and adopt policies that will lead to fairer markets and prosperity for all of our citizens", he said.
China has announced plans to put tariffs of up to 25% on United States products worth $60 billion, the latest salvo in an escalating trade war.
The US already imposed 25 percent tariffs on $34 billion in Chinese goods, with another $16 billion to be targeted in coming weeks.
The higher tariffs, which would apply to some $200 billion in Chinese imports identified by the administration last month, represent an effort to get Beijing to address longstanding unfair trade practices, officials say.
The latest signal that China's economy may be feeling some pain associated with Trump's tariffs on about $34 billion in Chinese goods was the softening of the Purchasing Managers' Index (PMI) in July.
"If someone wants a trade war", China's commerce minister Zhong Shan has said, "we will fight to the end". This wave of tariffs would include a wide range of products, from dog food to furniture, bicycles to beauty products.
Representatives of U.S. Treasury Secretary Steven Mnuchin and Chinese Vice Premier Liu He have been speaking privately as they seek to restart negotiations to defuse the budding trade war, Bloomberg reported, citing sources.
"We hope that those directly involved in the United States' trade policies can calm down, carefully listen to the voices of USA consumers. and hear the collective call of the global community", Wang Yi, the Chinese government's top diplomat and a member of the country's state council, or cabinet, said in Singapore.
China's government, however, shows no sign of bending to Washington's pressure.
President Trump and the European Commission President Jean-Claude Juncker agreed last week to put their tariffs on hold while the two sides negotiate, including on the dispute over steel tariffs, which gives the USA more leverage to pressure China.
While a trade dispute is obviously not comparable to a shooting war, the current U.S.
Chinese Foreign Ministry Spokesperson Geng Shuang said on Thursday that China will advise the U.S. to change its attitude, stop making false accusations, and return to the land of reason. "The cost increases will be passed on to customers, so it will affect most Americans pocketbooks". He also has threatened a further round of tariffs on $300 billion of Chinese goods.
Hearings are scheduled for Aug. 20 to 23 and the comment period has been extended to September 5 from late August, according to Lighthizer's office.
The duties could take effect after the administration draws up its revised, final list of imports following a public comment period.