The Trump administration said on Tuesday that the U.S. would follow through with tariffs on billions of dollars of Chinese imports, defying a trade truce reached last month in Washington. White House advisers insisted on fundamental changes in ties between the world's two biggest economic powers.
U.S. Commerce Secretary Wilbur Ross led the U.S. team in negotiations this weekend with Chinese officials after several days of talks by lower-level officials.
The discussions are meant to ease tensions after Washington said it would follow through with tariffs on Chinese imports despite a truce reached between the two sides in the U.S. last month.
An apparent truce was reached in Washington last month when Mr Liu said the two sides would discuss ways to enhance trade instead of slapping escalating tariffs on each other.
Secretary Ross's team left Beijing without settling those issues and without any joint statement by negotiators.
This week, the White House renewed its threat to slap tariffs on $50 billion worth of Chinese imports, tighten restrictions on Chinese investments in the U.S. and stiffen export controls. "This is about structural changes", Mnuchin said Saturday.
"[The move] targets America's allies when we should be working with them to address the unfair trading practices of countries like China", he told the USA media.
The United States has threatened to impose tariffs on up to $50 billion of Chinese products in a dispute over Beijing's aggressive tactics to challenge U.S. technological dominance; Trump has asked U.S. Trade Rep. Robert Lighthizer to look for another $100 billion in Chinese products to tax.
It referred instead to a consensus they reached last month in Washington, when China agreed to increase significantly its purchases of us goods and services.
Nationalistic tabloid Global Times said in an editorial that the United States ploy of alternating between threats and offers to negotiate showed that it may change its position at any time, and China must be prepared for a long-drawn trade conflict.
"The achievements reached by China and the United States should be based on the premise that the two sides should meet each other halfway and not fight a trade war", Xinhua said.
After the apparent cease-fire, global financial markets rallied in relief.
Last week, the Trump administration then announced it would roll out duties on Chinese imports worth $50 billion, mainly from the technology sector.
China will also open its financial services market to foreign companies, and lift foreign ownership restrictions on electric auto manufacturers, prompting Tesla to register a company in Shanghai last month. Navarro later called Mnuchin's conciliatory comments "an unfortunate soundbite".
Ross and the large American delegation had dinner Saturday evening with their Chinese hosts. China balked at making concessions unless the US lifted the tariff threat.
If the USA moves forward with sanctions, "all the economic and trade achievements negotiated by the two parties will be void", Xinhua state news agency said in a statement.
That comes at the same time Trump has riled some of America's closest allies with the imposition of tariffs on steel and aluminum imports. Trump has criticized the massive trade gap between the two countries.
Canada plans to impose tariffs of up to 25% on about $13bn worth of United States exports from 1 July.
Canadian Prime Minister Justin Trudeau: "These tariffs are totally unacceptable". He also pushed back against the argument that Canadian steel poses a US security threat.
"Tariffs and expanding exports - the United States can't have both", it said.
French Finance Minister Bruno Le Maire compared Washington's action to something out of the old "Wild West".
He said Washington would use its move on Tuesday to slap punitive tariffs on Chinese imports as a bargaining chip.