Global investors were jittery Thursday as the clock ticked toward a midnight deadline when President Trump plans to hike tariffs on $200 billion worth of Chinese-made goods from 10 percent to 25 percent.
And authorize a new 25 percent tariff on an additional $125 billion in goods not touched by the original tariff.
Trump on Thursday showing no sign of changing his mind.
(SOUNDBITE) (English) U.S. PRESIDENT DONALD TRUMP, SAYING: "I did get, last night, a very beautiful letter from President Xi, 'let's work together, let's see if we can get something done.'
But they renegotiated the deal.
They took many, many parts of that deal and they renegotiated and you can't do that.
And I'm different than a lot of people.
I tend to think that tariffs for our country are very powerful." That means a tariff bump will now sit awkwardly in the middle of two days of trade talks in Washington.
China's commerce ministry responded on Thursday.
(SOUNDBITE) (Mandarin with English translation) GAO FENG, CHINESE COMMERCE MINISTRY SPOKESMAN, SAYING: "China hopes the United States meets China half way and resolve problems through dialog rather than unilateral steps.
At the mean time, China is fully prepared, determined and capable of defending its legal rights." Also saying it's made the ultimate gesture by still sending a team to Washington, including Vice Premier Liu He.
Reuters senior china correspondent Michael Martina.
(SOUNDBITE) (English) REUTERS SENIOR CHINA CORRESPONDENT MICHAEL MARTINA, SAYING: "What we're hearing from sources is that there's a real perception within US circles that they think China perhaps miscalculated and overestimated the United States desire to strike a trade deal for the sake of political expediency.
As one source said to me, Liu He would have to go to Washington and create some kind of miracle to prevent tariffs from going forward." Observers had - until recently - thought there was an end in sight.
But Reuters revealed exclusively on Wednesday that Trump ordered the tariff hike after White House negotiators told him China was backtracking on almost all aspects of a draft agreement made last week.
Global investors - now awaiting any clues from Thursday's talks in Washington that the two sides are ready to back away from the brink.