China could target Wisconsin with trade retaliation says Georgetown University expert

New tariffs set to kick in as US-China trade talks to continue

-Chinese relations may be testing a new low.

United States and Chinese officials are to resume negotiations later on Friday morning for a second day as the world's two largest economies seek to hammer out an agreement.

Three issues lie in the way of an agreement between China and the United States, which will have to be ironed out in upcoming talks in Beijing, said China's chief trade negotiator as the U.S. moved to impose higher tariffs on Chinese goods.

Since a year ago, the United States and China have exchanged tariffs on more than $360 billion in two-way trade, gutting USA agricultural exports to China and weighing on both countries' manufacturing sectors.

Chinese Vice Premier Liu He, right, arrives at the Office of the United States Trade Representative in Washington on Friday for trade talks. "China trade negotiations, and we will have to adapt to that", said the commentary carried on Taoran Notes, a social media site which Beijing has increasingly been using to manage domestic expectations on the trade war. "For China, we think this is a very serious issue and can not compromise on it easily". The International Monetary Fund estimates the pullback on the US expansion at about 0.2 point, and potentially more if there's a blow to markets and confidence.

Liu also said the two sides were disagreeing over the amount of goods China would pledge to purchase from the U.S.to help reduce the American trade deficit. Trump appears to be suggesting that a tariff increase would generate revenues that could then be spent on farm products and infrastructure, something that might in theory require support from Congress.

"Talks with China continue in a very congenial manner - there is absolutely no need to rush - as Tariffs are NOW being paid to the United States by China of 25 per cent on 250 Billion Dollars worth of goods & products".

TRUMP: "Tariffs will bring in FAR MORE wealth to our Country than even a phenomenal deal of the traditional kind". The escalation with China also signaled Trump's willingness to risk more economic and political damage on his apparent belief that trade wars ultimately are winnable.

"The fact that the two sides have agreed to continue negotiations on Friday is offering a glimmer of hope that the relationship between the two powers hasn't deteriorated beyond fix".

The latest USA increase might hit American consumers harder, said Jake Parker, vice president of the U.S.

Los Angeles Lakers, Tyronn Lue reach impasse in negotiations
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THE FACTS: The notion that China doesn't buy from USA farmers is false.

FILE PHOTO: U.S. President Donald Trump and China's President Xi Jinping meet business leaders at the Great Hall of the People in Beijing, China, November 9, 2017. The next consultations are set to take place in Beijing, but the timing is not yet clear.

China said it will be forced to retaliate, though the government didn't immediately specify how. "This is the first point", Liu said.

White House officials have stressed that both sides were eager to reach a deal.

Yang Delong, chief economist at First Seafront Fund Management in Shanghai, told AFP that the "sudden hardening" of Trump's tone is likely linked to the 2020 U.S. presidential election.

On Monday, hours after Trump said he meant to raise tariffs, the Chinese central bank cut the amount of reserves that some small and medium-sized banks need to hold, freeing up more funds for lending to cash-strapped firms.

In earlier tweets, Trump defended the tariff hike and said he was in "absolutely no rush" to finalize a deal, adding that the USA economy would gain more from the levies than any agreement.

It has also once again demonstrated that no victor comes out of a trade war.

"A real enforcement mechanism is critical", the American Chamber of Commerce in Shanghai said in a statement.

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