President Trump said Thursday that he will slap a 10% tariff on $300 billion in Chinese imports Sept. 1 because President Xi Jinping is “not going fast enough” on trade talks, swiftly erasing a day of gains on Wall Street and rattling retailers that say it’s U.S. consumers, not Beijing, who will take it on the chin.

In a sudden announcement, the president said Mr. Xi failed to meet two U.S. preconditions for holding off on further tariffs: that he block shipments of synthetic opioids to the U.S. and purchase more American farm products.

“I think he wants to make a deal, but frankly he’s not going fast enough,” Mr. Trump said of Mr. Xi. “He said he was going to be buying from our farmers. He didn’t do that. He said he was going to stop fentanyl from coming into our country. It’s all coming out of China. He didn’t do that. We’re losing thousands of people to fentanyl.”

Mr. Trump said the tariffs will be on top of heftier levies affecting more than $250 billion in imports and will start at 10% but could slide up to 25%, unless both sides strike a deal.

Trade negotiations fell apart in May with Mr. Trump accusing the Chinese of reneging on earlier commitments. Talks appeared to get back on track in June during the Group of 20 summit in Japan, where Mr. Xi made the commitment to buy more American farm products.

Mr. Trump has downplayed the chance of a deal since then. He suggested that the Chinese are trying to wait and see whether he loses his 2020 reelection bid so they can deal with someone else.

“They’re praying, they’re praying. They would like to see a new president in a year and a half so they can continue to rip off the United States like they’ve been doing for the last 25 years,” Mr. Trump told supporters at a Thursday evening rally in Ohio.

The president said he would like to sign a deal, but it would have to be on his terms. Otherwise, he said, he will continue with hefty tariffs.

“We have rebuilt China. Now it’s time that we change things around,” he told White House reporters earlier Thursday, making the case that trade flows are imbalanced. “If they don’t want to trade with us anymore, that would be fine by me. It would save a lot of money.”

Mr. Trump insists that China is paying the tariffs directly into U.S. coffers, even though retailers and analysts say costs are passed on to U.S. consumers.

“China eats it, they have to pay it,” Mr. Trump said. “Until such time as there is a deal, we’ll be taxing them.”

Stocks took a dive after the tariff announcement despite a rosier picture earlier in the day. The Dow Jones Industrial Average closed 280 points down, just over 1%.

Retailers said Mr. Trump was headed down the wrong path.

“We are disappointed the administration is doubling down on a flawed tariff strategy that is already slowing U.S. economic growth, creating uncertainty and discouraging investment. These additional tariffs will only threaten U.S. jobs and raise costs for American families on everyday goods,” said David French, senior vice president for government relations at the National Retail Federation.

“The tariffs imposed over the past year haven’t worked, and there’s no evidence another tax increase on American businesses and consumers will yield new results,” he said. “We urge the administration to bring our allies to the table and find new tools beyond tariffs to achieve better trade relations.”

On Capitol Hill, Sen. Ron Wyden of Oregon said he is “first in line” for cracking down on China but Mr. Trump appears to lack a winning strategy.

“The tariffs announced today will raise costs on everything from computers to backpacks to clothes as kids go back to school, without any reason to think that it will make China stop stealing our technology and undercutting American jobs,” Mr. Wyden said. “Trump said he’d bring back Americans’ jobs. Instead, he’s picking their pockets.”

The U.S. Chamber of Commerce said the tariffs “will only inflict greater pain on American businesses, farmers, workers and consumers, and undermine an otherwise strong U.S. economy.”

Even as he slammed China, Mr. Trump held out hope for a trade deal after “constructive” talks between both sides in Shanghai this week.

Mr. Trump said his new levies will take effect as Chinese negotiators travel in September to Washington, the site of failed talks this spring.

“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!” Mr. Trump tweeted.

In the meantime, retailers said, consumers should brace for higher prices on items including cellphones and fireworks.

The National Fireworks Association said it is bracing for a “boom tax” on its product.

“Unless the president proposes to radically change the wage and regulatory environment, China will remain the source for 95% of our nation’s consumer fireworks,” said Steve Houser, secretary of the National Fireworks Association. “We simply have no other option. This will force us to simply suffer under another tax.”

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