China is seeking compensation from the U.S. for potential lost trade due to the proposed tariffs on steel and aluminum announced by President Donald Trump earlier this month in what could be the first step toward a formal dispute between the two countries in the World Trade Organization, Bloomberg News reported March 26.

The Asian nation also dismissed the United States' claim that the new tariffs are on national security grounds. In filings to the WTO, China said the tariffs are safeguard measures proposed by the U.S. to protect its domestic producers.

China may start formal dispute proceedings at a later date if the U.S. does not agree with China's claim.

Earlier in March, China's Ministry of Commerce said it plans to impose a 15% tariff on 120 U.S. products, including 33 types of seamless steel pipes in phase one, and apply a 25% tariff on eight U.S. products including scrapped aluminum in a second phase.

China's reciprocal tariffs are expected to affect US$3 billion in U.S. exports, whereas the U.S. is targeting US$50 billion in tariffs on Chinese imports, triggering fears of a trade war between the two countries.