Trump tweeted that US officials had just returned from "constructive" talks with China, but again blamed China for backing out of a trade deal three months ago. He said while talks would continue, from September 1, the US would impose a 10% tariff on US$300 billion of goods being imported from China.
"We look forward to continuing our positive dialogue with China on a comprehensive Trade Deal, and feel that the future between our two countries will be a very bright one!" Trump tweeted.
US stocks were down by about 1% and oil plunged nearly 8% to US$53.95 a barrel.
Zinc, lead and aluminium lost more than 1% each in London, while copper dropped 0.5%.
Only nickel was up with a 0.9% rise.
The MySteel 62% Australian iron ore fines price dropped 4.6% to $112.85 per tonne after Vale said it expected to lift output in the current half.
Spot gold was trading at US$1,446 an ounce or a record high of A$2123.80/oz.