US trade delegation in Beijing amid heightened 'trade war' concerns

A US trade delegation met Chinese vice-premier Liu He in Beijing on Thursday afternoon with negotiations ongoing amid the backdrop of rising economic tensions between the two countries.

Yet some analysts thought talks to avoid a trade war between the two nations would be hampered by the very fact that the Trump administration had sent a large group, including Treasury Secretary Steven Mnuchin, Commerce Secretary Wilbur Ross and US Trade Representative Robert Lighthizer.

So many delegates may struggle to "stay on message," in the words of Credit Suisse’s Maggie Cage.

Late on Wednesday, President Trump had tweeted: "Our great financial team is in China trying to negotiate a level playing field on trade! I look forward to being with President Xi in the not too distant future. We will always have a good (great) relationship!"

The White House has threatened to impose tariffs on roughly $150bn of Chinese goods, with China responding with tariffs of its own on US goods.

The President’s objective is to reduce his country’s trade deficit by $100bn and alter policies that western companies say force them into sharing technology with Chinese firms in exchange for access to their market.

It is understood that while China is potentially open to reducing its own $375bn goods trade surplus with the US and opening its manufacturing sector to more foreign investment, Trump’s goal of reducing the trade gap between the nations by $100bn is viewed as extreme in Beijing.

Speaking to the Financial Times Lü Xiang, an American affairs expert at the Chinese Academy of Social Sciences, said: "China’s bottom line is that the US will not get anything through blackmail. China is waiting to see what the US will put on the table. But if they pull out a gun and point it at us, then they can finish their tea and leave."