US President Donald Trump’s escalation of a trade war with China has left plans for high-level negotiations later this week in limbo.
Stocks around the world tumbled and oil prices hit a one-month low after Trump tweeted on Sunday he would raise tariffs on $US200 billion ($A286 billion) worth of Chinese goods to 25 per cent from 10 per cent by the end of the week, and would “soon” target the remaining Chinese imports with tariffs.
The announcement ended a four-month truce in a trade war that has cost the world’s two largest economies billions of dollars, slowed global growth and disrupted manufacturing and farming.
It was unclear on Monday whether Chinese Vice Premier Liu He would travel as planned to Washington for talks scheduled to start on Wednesday.
A Washington-based source familiar with the talks said the Chinese side was reconsidering whether Liu would attend after Trump’s tweet.
“The atmosphere of the negotiations has changed,” a Chinese official with knowledge of the talks said, adding that how the discussions would proceed was being re-evaluated.
“All that depends on the attitude of the United States,” the official said.
A Chinese delegation was still preparing to go to the US for trade talks, Chinese Foreign Ministry spokesman Geng Shuang said earlier on Monday in Beijing, without saying whether Liu would be part of it.
Trump’s comments on Sunday came as a surprise after he and members of his team had repeatedly said the two sides were making progress on a deal.
Tensions between the two countries had eased as talks progressed after Trump and Chinese President Xi Jinping agreed to a truce in the trade war in late November.
As recently as Friday, Trump had cited progress towards a deal.
The United States is demanding sweeping changes to China’s economic policies, including better protection of US intellectual property, ending forced technology transfers and cyber theft of American trade secrets.
Washington also wants more access to China’s vast markets for US companies, curbs on industrial subsidies and increased purchases of American products.
Trump appeared to defend his decision in a tweet early on Monday, lashing out over the US trade deficit with China. He also said he spoke with Japanese Prime Minister Shinzo Abe on trade in a “very good conversation”.
“With China we lose 500 Billion Dollars. Sorry, we’re not going to be doing that anymore!” Trump tweeted.
The United States imported about $US539.5 billion ($A771 billion) in goods from China in 2018 and exported $US120.3b ($A171.9b), for a record trade deficit of $US419.2b ($A599b), according to US Census Bureau data.
Trump’s change in tone came after US Trade Representative Robert Lighthizer told him that significant obstacles remained to a trade deal, and that China was pulling back from some previous commitments, people with knowledge of the talks said.
Lighthizer briefed Trump following a round of talks in Beijing last week.