Global markets suffered a blow at the start of the week after trade tensions escalated once again. On Sunday, President Trump in two tweets said he intends to impose additional tariffs on Chinese goods as negotiations on a trade deal with the U.S. are progressing "too slowly" for his liking. Specifically, he seeks to hike the 10% tariff on goods worth $200 billion to 25% on Friday and tax goods worth $325 billion at 25% "shortly." Chinese negotiators led by Vice Premier Liu are expected to travel to Washington this week for more trade talks, but some reports suggest they may be called off or delayed.

Chinese stocks slumped in response to the news, with the Shanghai composite, Shenzhen composite and Hang Seng indexes closing 5.58%, 7.38% and 3.31% lower, respectively. The yuan plunged to 6.75 to the dollar, its steepest fall since 2016. Elsewhere in Asia, Japan's Nikkei 225 index and Australia's S&P/ASX 200 dipped less than 1%.

All major indexes in Europe besides Britain's FTSE 100 were bathed in red at 4:18 a.m. ET., with Germany's DAX and France's CAC dropping close to 2%.The STOXX Europe 600 index had fallen 1.31%.

U.S. futures indicated a rough day ahead for stocks. The S&P 500 and Dow futures were both close to 2% lower in the early hours of Monday, and the tech-focused Nasdaq 100 index futures tumbled 2.05%. U.S. chip makers NVIDIA Corp. (NVDA), Qualcomm Inc. (QCOM) and Advanced Micro Devices Inc. (AMD) were all set to fall over 4%. Shares of tech giant Apple Inc. (AAPL), which also generates a significant proportion of sales from China, saw its shares drop over 3% lower in pre-market trading. Apple and six other stocks appeared on HSBC's recently published list of stocks with high China revenue exposure.

Investors drove up gold and the Japanese yen and the price of oil was hit amid the stock market turmoil. West Texas Intermediate crude was at $60.8 a barrel and global benchmark Brent crude had slipped 1.5% to $69.7 a barrel at 4:50 a.m. ET. The U.S. Dollar Index was close to flat.

The U.S. and China had signed a 90-day truce in December in which it was agreed that new trade tariffs would be halted and the two countries would "begin negotiations on structural changes with respect to forced technology transfer, intellectual property protection, non-tariff barriers, cyber intrusions and cyber theft." It appears Trump has decided to increase pressure on Chinese leadership to speed up the pace of negotiations and force a desired outcome. China's response to these threats will determine if we're headed for a full-blown trade war.