China's offshore yuan fell to an all-time low against the US dollar on Tuesday as trade tensions between the United States and China escalated after days of turmoil over tariffs.

The offshore yuan, which is circulated outside mainland China and is more freely traded than the currency in the domestic market, fell to $7.3948 in late afternoon deals, before falling further. 

That marks its weakest level since clearing banks in Hong Kong were given the go-ahead to open renminbi accounts freely in 2010.

The fall in the yuan's value comes as US president Donald Trump has upended the world economy with sweeping tariffs that have raised recession fears and led to a huge market sell-off. 

These tariffs come into effect against goods from a raft of nations on Wednesday, with Chinese products facing a 34-percent levy that Beijing will counter with a similar duty on Thursday.

Trump has warned he would impose additional levies of 50 percent if Beijing refused to stop pushing back against his tariffs. 

Faced with concerns about the Chinese economy, the onshore yuan, whose trade is regulated by Beijing, also dropped against the dollar.