Those threats were given new life this week when three unnamed sources were cited by Bloomberg as confirming that the Trump administration would go through with tariffs on the remaining US$260 billion of imports from China if upcoming talks between the two countries' leaders did not go well.
On September 24, Trump's fresh tariffs on $200 billion worth of Chinese goods and services entered force, with Washington warning that it could slap similar tariffs on another $267 billion of Chinese goods and services in the future.
The Japanese yen fell 0.4 percent to 112.34 per dollar, the biggest dip in nearly two weeks.
"I can make a deal right now, I just say they are not ready", Trump said in the interview. "I hope the United States side will also show sincerity and negotiate with China in a constructive manner", he added.
The Nasdaq composite, which is heavily weighted with technology stocks, lost 116.92 points, or 1.6 percent, to 7,050.29.
The response on Wall Street was to send the Dow plunging after it had opened by more than 300 points up. The Russell 2000 index of smaller-company stocks dropped 0.4 percent to 1,447.31. Futures for the Dow were up 0.4 percent and the broader S&P 500 futures added 0.5 percent.
Broad gains in the U.S. equity market boosted a measure of global stock markets on Tuesday after President Donald Trump said a "great deal" could be struck with China that would relieve fears of a growing trade war between the world's two largest economies. China hiked tariffs on $110 billion in imports from the U.S. The trade fight between the USA and China has hurt sales, and that slowdown is one of several factors that have damaged vehicle company stocks this year.Ford climbed 3.3 percent to $9.28 and auto parts retailer BorgWarner advanced 4 percent to $39.56. China's overnight repo rate surged the most in more than four years as authorities take steps to combat bets against the yuan, which held near the weakest level in a decade against the greenback.
The pan-European STOXX 600 index rose 0.01 percent.
Futures signaled gains for equities in Hong Kong and China, while Japanese stocks were seen opening slightly lower. Trade-sensitive industrial shares rose almost 1.2 per cent in mid-morning trading. Brent crude, used to price worldwide oils, lost 19 cents to $77.18 per barrel. The yen edged lower after the Bank of Japan left its monetary stimulus unchanged and kept its 10-year bond yield target at about zero percent.
Brent crude futures fell $1.34 to $76.00 a barrel, a 1.7-per-cent drop. Copper was little changed at $2.74 a pound.The dollar rose to 112.35 yen from 111.85 yen.