President Donald Trump and China's President Xi Jinping (not shown) make a joint statement at the Great Hall of the People on November 9, 2017 in Beijing, China.

U.S. President Donald Trump may have to choose between supporting the U.S. stock markets and hampering the Chinese economy enough to make Beijing bend on the ongoing trade dispute.

Reports from both sides had indicated progress in the drawn-out negotiations toward a trade deal — with an agreement even possible this week. But in a surprise move, Trump tweeted Sunday local time that tariffs on $200 billion worth of Chinese goods would increase to 25% on Friday. He added that a 25% tariff would "shortly" be imposed on an additional $325 billion of imported goods from China.

"The Trade Deal with China continues, but too slowly, as they attempt to renegotiate. No!" Trump said in a tweet.

Dow futures dropped more than 450 points after Trump's tariff threat and reports, including one from CNBC, that the Chinese were considering canceling trade talks that had been scheduled for this week.

Chinese markets, meanwhile, tanked more than 5% on Monday, but that's unlikely to be enough to shake Beijing's resolve.

"Trump's latest move increases his economic leverage but will not lead China to surrender on his terms," Michael Hirson, practice head, China and Northeast Asia, at consulting and research firm Eurasia Group, said in an email.

"China's political cohesion gives Beijing an important asset in withstanding the pressure from Trump, and employing economic measures to keep up growth and support weak points in the economy," Hirson said. "But there is no question that Beijing's challenge just got much more difficult."

Official Chinese channels were quiet Monday morning. Chinese state media was muted on the latest Trump tweets. The Ministry of Commerce and Ministry of Foreign Affairs referred CNBC to their regular press conferences, set for Thursday and Monday afternoon, respectively.

A tariff increase on the $200 billion figure would be a delayed implementation of a raise planned for earlier this year. They would have a moderate impact on China's economy, of about 0.2 to 0.3 percentage points, according to Nick Marro, Hong Kong-based analyst at The Economist Intelligence Unit.

On the other hand, a 25% tariff on $325 billion would put duties on virtually all goods China exports to the U.S. Such a broad application of tariffs — and expected retaliatory duties from Beijing — could hit China's headline gross domestic product by at least 0.3 or 0.4 percentage points, slowing growth to 6% or less, Marro said in a phone interview.

UBS Economists Tao Wang and Ning Zhang had similar forecasts.