China, US to hold trade talks next week

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The Commerce Ministry last week said that Beijing was preparing to work with Washington to implement the broad consensus reached, referring to the agreement reached in Argentina between Xi and Trump. Officialsfrom both countries spoke on the phone Friday, it added.

Still, it will hardly be easy to bridge the complex differences between the world's top two economies. China's Shanghai Composite Index sank almost 25 per cent.

Last year, China and the U.S. imposed tariffs on more than $300bn (£237bn) worth of each other's goods.

White House economics adviser Kevin Hassett was in a chipper mood on Thursday as he predicted many companies will announce lower than expected earnings as a result of the trade war with China.

Jeffrey Gerrish, the USA deputy trade representative will lead the delegation travelling from Washington to China. The Dow was off 5.6 percent for the year, with the broader Standard & Poor's index of 500 stocks down 6.2 percent. Cutting a deal with Beijing could help at least reduce the threat.

China's economy has lost momentum in the a year ago as the governmenthas tried to curb risky lending.

Other drivers of USA growth, including government and business spending and net exports, are all sagging or expected to do so in coming months. But heavy government spending masked weakness in private-sector activity.

USA factory activity slowed more than expected in December, according to the Institute for Supply Management (ISM), while Chinese data on Monday showed its manufacturing activity contracted for the first time in more than two years.

Auto sales in China plunged 16 per cent in November from a year earlier. That would expand US tariffs to nearly all of China's exports to the U.S. Those ambitions cut to the heart to China's drive to become the world's 21st century economic superpower.

"If we don't make a deal, then I'm going to put the $267 billion additional on", at a tariff rate of either 10 percent or 25 percent, Trump told the Journal.

Wendy Cutler, a former USA trade negotiator, said the US likely can't realistically settle for anything less than an agreement by Beijing to reform how it does business.

Those familiar said other United States attendees include Mr Gil Kaplan, Undersecretary of Commerce for International Trade; Mr Ted McKinney, Undersecretary of Agriculture for Trade and Foreign Agricultural Affairs; and Ms Merry Lin, director for global and Asia economics at the National Security Council. "However, these reasons can only take you so far..."