China reneges on multiple aspects of draft trade agreement

The White House received a diplomatic cable from Beijing late on Friday night containing systematic edits to the pair's nearly 150-page draft trade agreement, threatening to undo months of negotiations between the world's two largest economies.

According to multiple sources cited by Reuters, Chinese officials had undermined several of America's core demands when revising the seven chapter long draft trade deal, including removing a pledge to change laws including on the theft of US intellectual property and trade secrets, forced technology transfers, competition policy, access to financial services and currency manipulation - the very grievances that had led Washington to embark on a trade war in the first place.

In response, Donald Trump took to Twitter to announce an increase in tariffs, from 10% to 25%, on $200bn-worth of Chinese goods, including internet modems and routers, printed circuit boards, vacuum cleaners and furniture.

The removal of binding legal language from the draft was of particular concern to US trade representative Robert Lighthizer, who has been pushing for an enforcement regime, including punitive economic sanctions, similar to those imposed on the likes of North Korea and Iran.

Lighthizer and Treasury Secretary Steven Mnuchin were taken aback by just how many amendments were made to the draft and said Chinese vice premier Liu He's request that the US trust China to fulfil its pledges through administrative and regulatory changes was unacceptable, given what were described as Beijing's past failings.

Liu will arrive in Washington on Thursday for a further two days of talks but Lighthizer asserted that, no matter what the outcome of the discussions, "come Friday, there will be tariffs in place."