US officials have said China backtracked on substantial commitments it made during trade talks with the United States, prompting President Donald Trump to impose additional tariffs on Chinese goods slated to go into effect on Friday.

The swift deterioration in negotiations between the world’s two largest economies hit global financial markets as investors faced the prospect of an escalation rather than an end to a 10-month-old trade war.

On Sunday, Trump tweeted he would raise tariffs on $200bn worth of Chinese goods from 10 percent to 25 percent by the end of the week, and would “soon” target the remaining Chinese imports with tariffs, sending stocks and oil prices lower on Monday.

US Trade Representative Robert Lighthizer, who has been an advocate for tough structural changes in China, said Beijing reneged on commitments it had made previously that would have changed the agreement substantially.

“Over the course of the last week or so, we have seen … an erosion in commitments by China,” Lighthizer told reporters. “That, in our view, is unacceptable.”

“We’re not breaking off talks at this point. But for now … come Friday there will be tariffs in place.”

Treasury Secretary Steven Mnuchin, considered to be less hawkish towards China, said Beijing’s backtracking became clear with “new information” over the weekend. He declined to give specifics and said the US side had originally hoped to conclude a deal one way or the other this week.

“They were trying to go back on language that had been previously negotiated, very clear language, that had the potential of changing the deal dramatically,” said Mnuchin.

“The entire economic team … are completely unified and recommended to the president to move forward with tariffs if we are not able to conclude a deal by the end of the week.”

Chinese Vice Premier Liu He is expected to be in Washington on Thursday and Friday of this week for further talks.

A spokesperson at the Chinese embassy in Washington did not immediately respond to queries about the US assertions.

“We are also in the process of understanding the relevant situation. What I can tell you is that China’s team is preparing to go to the United States for the discussions,” Chinese Foreign Ministry spokesman Geng Shuang said in Beijing earlier.

“We still hope the United States can work hard with China to meet each other halfway, and strive to reach a mutually beneficial, win-win agreement on the basis of mutual respect.”