China shot back on Friday after President Donald Trump announced on Twitter that the U.S. would impose an additional 10 percent tariff on $300 billion in Chinese imports starting next month.
Chinese foreign ministry spokeswoman Hua Chunying called Trump's move a "serious violation" and warned Beijing would have to take "necessary countermeasures" if the tariffs were imposed.
"We don't want to fight, but we are not afraid to fight," Hua told a briefing on Friday. "China will not accept any extreme pressure, intimidation and blackmail."
Chinese shares plummeted, and the yuan, its currency, fell to its lowest since November in early trading.
The trade war between China and the U.S., the world's two largest economies, has rocked markets across the world for the last year and a half.
"We thought we had a deal with China three months ago, but sadly, China decided to re-negotiate the deal prior to signing," wrote Trump in a series of tweets Thursday afternoon.
He sent the tweets after an 11:30 a.m. ET meeting at the White House, in which Trump's trade team briefed the president on how recent negotiations in China had gone, CNBC reported. His messages suggest Trump is frustrated with China's lack of follow-through.
U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin have just returned from trade talks in Shanghai, where little progress appeared to have been made. The negotiations reportedly ended early. A new meeting has been set up for September, the White House said earlier this week.
"More recently, China agreed to buy agricultural product from the U.S. in large quantities, but did not do so. Additionally, my friend President Xi said that he would stop the sale of Fentanyl to the United States — this never happened, and many Americans continue to die!" Trump tweeted.
Trump said that although the talks were "continuing" the U.S. would start on Sept. 1 putting a "small additional tariff" of 10 percent on the remaining $300 billion of Chinese goods coming into the U.S. This does not include the $250 billion on which he has already imposed a tariff of 25 percent, he added.
"We look forward to continuing our positive dialogue with China on a comprehensive Trade Deal, and feel that the future between our two countries will be a very bright one!" he wrote.
Immediately after Trump's announcement, Wall Street pulled back on the news, with the Dow Jones Industrial Average falling from a 300-point gain to a decline of almost 200 points.
The price of crude oil tumbled by 8 percent on concern over the global fallout of Trump's latest salvo. Caterpillar, John Deere, and Apple, all of which have a large exposure to China, saw their stock fall by around 2 percent on the news. And the yield on the 10-year Treasury note fell to its lowest level since 2016.
Negotiations between the two sides stalled in May, after Beijing reportedly sent Washington a 150-page document that reneged on several previous concessions. That led to Trump hiking tariffs on $200 billion of imported Chinese goods to 25 percent, bringing the total levied at that rate to $250 billion.
The new measures announced Friday mean that virtually every import to the U.S. from China would have a tariff levied on it come Sept. 1, according to Reuters.
Since the trade war broke out last year, China has responded by imposing tariffs of up to 25 percent on about $110 billion of U.S. goods.
The relationship between the two sides further deteriorated after Trump blacklisted Chinese tech giant Huawei, a situation that remained unresolved even after Trump and his counterpart, Chinese President Xi Jinping, met on the sidelines of the G-20 economic summit in Osaka in June.
The International Monetary Fund warned in June that the ongoing tit-for-tat could slash global economic output by 0.5 percent next year, cutting economic output by $455 billion.