US President Donald Trump announced on Sunday that the United States will raise tariffs on $200 billion of Chinese goods - a blunt warning to Beijing just days before what is being billed as a last-ditch round of talks to reach a deal or resume their trade war.
Chinese President Xi Jinping's top trade envoy, Liu He, returns to Washington this week for what could be a closing round of trade talks.
Via Twitter, the president said that insufficient progress in bilateral talks would prompt him to hike duties on certain Chinese goods as early as Friday, which were originally held in abeyance pending the outcome of trade talks.
In the bilateral consultations, Washington and Beijing are trying to work out a mutually acceptable trade agreement that would put an end to an nearly year-long tariff war between the world's largest economies.
It follows signals from Washington that a US-China trade deal was imminent.
Not everyone is convinced Trump really intends to impose the hike on Friday.
Michael O'Rourke, chief market strategist at JonesTrading said investors may not panic completely yet as they could see Trump's comments as a negotiating tactic. Recently, officials from both nations have said that the talks are in their final stages.More news: Game Winner Among Kentucky Derby Pre-Race Favorites
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Trump says he wants to reduce the huge U.S. trade deficit with China, which in 2018 totalled $378.73 billion if you include trade in services.
Chinese officials have surprised USA negotiators by appearing to backtrack on several points that the US thought had already been agreed to, including steps to crack down on cyber-hacking and state-subsidies to companies owned partly or wholly by the Chinese government, according to people familiar with the matter.
To turn up the heat on Beijing, Trump has even threatened to impose tariffs on all Chinese products entering the USA, which were worth $539.5 billion previous year. Treasury Secretary Steve Mnuchin called the previous April talks between the US and China "productive".
Those tariffs have put pressure on businesses that source and sell products in the two countries.
"The Tariffs paid to the US have had little impact on product cost, mostly borne by China", he said.
The administration has been insisting on a mechanism to ensure that China follows through on any promises to purchase more American goods.
"Nobody in the business community likes the tariffs", he said.