Electric car manufacturer Tesla has hiked the price tags of its cars in China, becoming one of the first carmakers from the US to react over rising trade tensions between the two countries.

The company raised the prices of its Model X and S cars in China by up to $37,600 (£28,226), according to local reports.

As the deadline for President Donald Trump to reconsider imposing tariffs on $34bn worth of Chinese goods passed on Friday, the Chinese government immediately responded in kind, which will have been a major factor in Teslas decision to hike prices.

Read more: Trade war erupts as China fights back against US tariffs

The company had been relying on demand from the Chinese market to bump sales of its electric cars, and had planned to build a facility there after the country previously announced significant tariff cuts for the automotive industry in May this year.

According to company data, China contributed roughly 17 per cent to Teslas total revenue in 2017, with the carmaker shipping an estimated 15,000 cars per year to the country.

Earlier in the day, the Chinese commerce ministry said it intends to use the revenue from the tariffs on US imports to support Chinese companies and any employees affected by Trumps levies against Chinese imports.

Tesla made headlines last week as it successfully achieved its goal of making 5,000 Model 3 sedans per week by the end of June.

Read more: Tesla's engineering boss steps down as its share price wavers

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