President Trump Donald John TrumpFederal prosecutor speaks out, says Barr 'has brought shame' on Justice Dept. Former Pence aide: White House staffers discussed Trump refusing to leave office Progressive group buys domain name of Trump's No. 1 Supreme Court pick MORE on Tuesday threatened to raise tariffs on China if the two sides are unable to come to an agreement on a trade deal.

"I have a good relationship with China," Trump said during a Cabinet meeting. "We’ll see what happens. I'm very happy right now. If we don’t make a deal with China, I’ll just raise the tariffs even higher."

The comment is likely to jolt markets and throw further into question the ability of the Trump administration to secure a trade agreement with Beijing.

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"Look, China’s going to have to make a deal that I like. If they don’t that’s it. OK?" Trump said.

The president announced last month that the two sides had come to an understanding on "phase one" of a deal, but it has yet to be finalized or signed by either party.

Trump and Chinese President Xi Jinping were expected to sign the preliminary deal at a since-canceled summit of Pacific nations in Chile that was originally scheduled for last weekend.

U.S. and Chinese officials are considering alternative locations to sign an agreement. However, there remain obstacles to finalizing the phase one deal, which is focused on financial services, agriculture and some intellectual property issues.

With less than a year until the 2020 presidential election, Trump is eager to secure a trade deal with China to fulfill a major campaign promise. The year-plus trade war between the world’s largest economies has also dampened the global economic outlook, raising risks for Trump as he attempts to ride a solid economy to reelection.

Trump has imposed billions of dollars in tariffs on Chinese goods to boost pressure on China's fading economy and induce Beijing to reform its trade practices. But China has responded by imposing retaliatory tariffs on U.S. goods, placing the burden on U.S. farmers who have faced rising prices and fading demand.

The Trump administration has doled out billions of dollars in financial aid to farmers directly affected by the trade war. Trump has insisted that the tariffs on China have essentially gone into U.S. coffers to fund those aid payments, but economists have highlighted that is not the case.