China Threatens To Hit Back Ahead Of Key Talks

The world's top two economies on Thursday were due to resume fraught trade talks in Washington just as a truce between them verged on collapse, with China warning overnight that it will retaliate if US impose new tariffs.

"China deeply regrets that if the US tariff measures are carried out, China will have to take necessary countermeasures," said a Commerce Ministry statement.

Chinese authorities already have extended retaliation beyond imports by targeting operations of American companies on the mainland. Regulators have slowed down customs clearance for their shipments and delayed issuing licenses in finance and other industries.

Beijing has an array of other weapons including launching tax, anti-monopoly or other investigations that can hamper a company's operations.

Trump threw global financial markets into turmoil with his surprise threat on Sunday to raise import duties on US$200 billion of Chinese goods from 10% to 25%. Trump complained talks were moving too slowly and Beijing was trying to backtrack on earlier agreements.

But overnight the US president tweeted that chief Chinese negotiator Liu He still wanted to "make a deal".

"China has just informed us that they [Vice-Premier] are now coming to the US to make a deal," Trump said on Twitter.

"We'll see but I am very happy with over $100 Billion a year in Tariffs filling US coffers ... great for US, not good for China!"

Trump's tweet suggested he was comfortable either with making a deal or with leaving the tariffs in place, however. (AFP, AP)