U.S. stock futures and Asian shares fell on Monday on growing anxiety over whether the United States and China will be able to salvage a trade deal, after Washington sharply hiked tariffs and Beijing vowed to retaliate.

The United States and China appeared at a deadlock over trade negotiations on Sunday as Washington demanded promises of concrete changes to Chinese law and Beijing said it would not swallow any “bitter fruit” that harmed its interests.

Investors are bracing for threatened “counter-measures” from China in retaliation for Washington’s tariff increase on Friday on $200 billion worth of Chinese goods. The move followed accusations by U.S. President Donald Trump that Beijing “broke the deal” by reneging on earlier commitments.

U.S. stock futures, the S&P 500 e-minis, shed 1.1%.

In early European trade, FTSE futures stood almost flat at 7,173, German DAX futures were down 0.1 percent at 12,069.5 and France’s CAC 40 futures were up 0.2 percent at 5,332.5.  

MSCI’s broadest index of Asia-Pacific shares outside Japan dropped 0.7%, nearing its two-month low marked on Thursday.