United States President Donald Trump said he plans to impose a 10 percent tariff on $300bn of Chinese imports from September 1 and could raise tariffs further if China’s President Xi Jinping fails to move more quickly to strike a trade deal.

The announcement on Thursday extends Trump’s trade tariffs to nearly all China’s imports into the US and marks an abrupt end to a temporary truce in a trade war that has disrupted global supply chains and roiled financial markets.

“I think President Xi … wants to make a deal, but frankly, he’s not going fast enough,” Trump said.

Trump made the announcement in a series of Twitter posts after his top trade negotiators briefed him on a lack of progress in US-China talks in Shanghai this week.

Trump later said if trade negotiations fail to progress he could raise tariffs further – even beyond the 25 percent levy he has already imposed on $250bn of imports from China.

And at a Thursday evening rally in Cincinnati, Trump said that until a deal is reached “we will be taxing the hell out of China.”

The news hit global financial markets hard.

Oil prices plummeted 7 percent, with Brent crude registering the biggest daily percentage drop since February 2016.

In US stocks, the benchmark S&P 500, which had been in solidly positive territory on Thursday afternoon, closed down 0.9 percent. Benchmark US Treasury yields also fell.

In Asia, Japanese benchmark share indices fell about 2 percent.

South Korean shares extended losses after Japan took its own trade-restriction move, directed at Korea, with the KOSPI index falling 2.2 percent in the Asian morning.

Chinese and Hong Kong stocks also opened lower.

US retail associations predicted a spike in consumer prices. Target Corp tumbled 4.2 percent, Macy’s Inc fell 6 percent and Nordstrom Inc was down 6.2 percent. Asked about the impact on financial markets, Trump told reporters: “I’m not concerned about that at all.”

Moody’s said the new tariffs would weigh on the global economy at a time when growth is already slowing in the US, China and the euro zone.

The tariffs may also force the US Federal Reserve to again cut interest rates to protect the US economy from trade-policy risks, experts said. The American central bank cut its main interest rate by a quarter of one percentage point on Wednesday, its first reduction in more than a decade. 

Raising tariffs would lower the prospects of a deal rather than expedite it, China’s Global Times newspaper said. Beijing would focus more on efforts to survive a prolonged trade war, Hu Xijin, editor-in-chief of the Communist Party-backed newspaper, said on Twitter.

“New tariffs will by no means bring closer a deal that the US wants; it will only make it further away,” Hu said.

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