Treasury Secretary Steve Mnuchin and U.S. Trade Representative Robert Lighthizer traveled to China to meet with Chinese officials and try to make a trade deal.
Stocks fell sharply as investors digested the latest tariff salvo, with the Dow Jones industrial average shedding about 300 points within minutes.
China retaliated with tariffs on 110 billion dollars in American goods, including agricultural products, in a direct shot at supporters of Mr Trump in the USA farm belt.
President Trump announced Thursday that the United States will impose a new 10% tariff on $300 billion worth of products imported from China, saying Beijing had broken some of the promises it made in trade negotiations.
But Trump indicated he was disappointed by the lack of progress in the talks, saying China had failed to follow through on promises to curb the sale of fentanyl and buy more products from USA farmers. "Many Americans continue to die", Trump said in a tweet.
In his tweets, Trump accused China of repeated reneging or failing to live up to past agreements. The White House said negotiations will continue in Washington next month.
USA and Chinese negotiators ended a brief round of trade talks in Shanghai on Wednesday with little sign of progress and agreed to meet again in September, prolonging a truce in a year-long trade war between the world's two largest economies. Oil prices tumbled about 8% after Trump's announcement on concerns that the tariffs would hurt demand. Soybean futures opened lower on Thursday as traders shrugged off the small amount, and losses accelerated after Trump's tweets.
For almost a year-and-a-half, China and the US have been locked in an ongoing trade dispute, with each country slapping escalating retaliatory tariffs on each other. China rejected the claims, with the state-owned Xinhua news agency reporting that millions of tons of U.S. soybeans have been delivered to China since July 19, with local businessmen also looking to purchase cotton, pork and sorghum.