China-US talks at risk after Trump threatens tariffs on Chinese products

Chinese and American officials have held a series of talks over the dispute, and reached at least one agreement which was subsequently abandoned by the US President

Mixed messages coming from the US on the trade war with China could sink prospective negotiations before they begin, damaging prospects for a resolution to the growing dispute.

With President Donald Trump telling aides to proceed with additional tariffs on Chinese products, the Chinese government is considering declining the offer of talks, according to a Wall Street Journal report, which cited officials with knowledge of the discussions. Beijing last week welcomed the invitation to meet with US Treasury Secretary Steven Mnuchin, an offer which was then undermined by a tweet from the president.

Stocks in Asia tumbled on Monday as a rally late last week on optimism of talks fizzled.

The lack of unity within the US administration on trade isn’t new — Chinese and American officials have held a series of talks over the dispute, and reached at least one agreement which was subsequently abandoned by the President.

The lack of progress and collapse of that deal have made future negotiations more difficult, as it’s unclear who speaks for the US administration and there’s a lack of confidence that any deal will be honored.

“The two sides are still lacking trust,” said Raymond Yeung, chief greater China economist for Australia & New Zealand Banking Group in Hong Kong. “China sees the US’s action following Liu He’s visit in May as dishonorable,” he said, adding that Trump’s tariff threat only rubs salt into the wound.

Officials from both countries have met four times for formal talks, most recently in August, when Treasury’s undersecretary for international affairs, David Malpass, led discussions in Washington with Chinese Vice Minister Wang Shouwen.