The Dow Jones Industrial Average slipped 31 points, with Disney as the biggest laggard. The S&P 500 rose 0.1 percent as financials underperformed. The Nasdaq Composite traded marginally lower.
The Chinese Ministry of Commerce announced a 25 percent charge on $16 billion worth of U.S. goods. The goods being targeted by China include vehicles such as large passenger cars and motorcycles. Various fuels are on the list, as well as fiber optical cables.
China's announcement comes after the U.S. Trade Representative's office released a finalized list of $16 billion worth in Chinese goods that will be hit with tariffs. The U.S. charges will take effect on Aug. 23. The latest U.S. list brings the total worth of Chinese goods facing a 25 percent tariff to $50 billion.
Shares of big exporters Caterpillar and Boeing fell 1.7 percent and 0.8 percent, respectively.
"This market has been able to look beyond trade tensions and look at fundamentals, but those fundamentals sort of run out of steam this week," said Art Hogan, chief market strategist at B. Riley FBR. "We slipped into a catalyst vacuum, which could push trade tensions back into the fore."
Wall Street has reached the tail end of the latest corporate earnings season. Nearly 90 percent of S&P 500 companies have released their calendar second-quarter. Of those companies, 76.36 percent have reported better-than-forecast quarterly profits, according to FactSet. If the earnings season ends with at least 80 percent of companies beating estimates, it would mark the first time that has happened since FactSet started tracking the data in 2008.
"The 2Q 2018 numbers for these … S&P 500 companies that have reported are better than how they reported last quarter in terms of year-over-year sales and earnings growth. There are also more companies beating estimates this quarter as well," Nick Raich, CEO of The Earnings Scout, wrote in a note Tuesday. "Considering the 2Q 2018 sales and earnings beat and growth rates, and the fact very high 2H 2018 EPS estimates have held up this quarter, there are not many negatives you can legitimately say about overall earnings at this point."
Amazon and Apple are among the companies that have reported better-than-expected earnings. CVS Health also posted better-than-expected earnings on Wednesday, sending its shares up by 4.2 percent.
There have been some notable disappointments this season, however. Facebook shares lost about a fifth of their value after releasing its quarterly figures. Most recently, Disney shares dropped more than 1.5 percent after the media giant posted weaker-than-expected earnings and revenue.
The S&P 500 closed Tuesday's session just half a percent from a record high. If the index breaks above 2,872.87, it would notch its first all-time high since Jan. 26. The Nasdaq Composite was also less than 1 percent away from a record while the Dow remained 3.7 percent below its all-time high through Tuesday's close.
"What the market is telling you, and I concur, is a 24 percent increase in earnings and a 9 percent gain in revenue is more impactful than these tariffs," said Mark Esposito, CEO of Esposito Securities. "That's why we're [near] an all-time highs."