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Trump added that an additional $325 billion worth of Chinese goods-the remainder of the total value of Chinese imports into the country-which now don't have duties, will have 25 percent tariffs imposed on them "shortly".

There was no immediate reaction from China about Trump's announcement. He said the 10 per cent would go up to 25 per cent on Friday.

"More likely, in our view, is that this renewed threat is an attempt to extract a few more minor concessions in the final days of talks", he said.

Mr. Trump turned up the heat by saying he would raise import taxes on $200 billion in Chinese products to 25 percent from 10 percent Friday.

Trump also raised the possibility of imposing a 25 per cent tariff on another US$325 billion in imports from China not now covered.

As recently as Friday, Trump said talks with China were going well.

"The Tariffs paid to the U.S. have had little impact on product cost, mostly borne by China", he said.

Bloomberg Economics chief economist Tom Orlik said: "It's possible talks are breaking down, with China offering insufficient concessions, and an increase in tariffs a genuine prospect".

Washington and Beijing have engaged in reciprocal tariff hikes over the previous year while negotiators have engaged in lengthy trade talks, alternating negotiations between the two capitals. If an agreement couldn't be reached then, the administration would increase all tariffs to 25 percent.

Wells Fargo Senior Economist Mark Vitner on the Trump administration trade negotiations with China and the state of the USA job market.

Once he took office, Mr. Trump's relationship with his Chinese counterpart, Xi Jinping, seemed to get off to a good start. While the Apple iPhone and other Apple devices have managed to evade the tariff charges, Trump is now talking about taxing hundreds of billions of dollars of additional Chinese products imported into the states, possibly including the iPhone.

American businesses say they agree with the administration's efforts to push for a more level playing field in China, but they also say the tariffs have hit them hard, Tim Stratford, the chairman of the American Chamber of Commerce in China, told The New York Times.

The S&P 500 has gained 17.5% so far this year partly due to a decision by the U.S. Federal Reserve to put rate hikes on hold but also due to hopes for a China deal.

The trade dispute between the world's two largest economies has sparked fears in financial markets.