The emerging stalemate in U.S. "This is a tool China will save as a last resort, and it may not even be used in the unlikely event of a breakdown in trade negotiations". That dispute grew out of an earlier deadlock over how and when to remove existing American tariffs that provoked Beijing to threaten quit the talks, people briefed on the discussions said.
The back-and-forth between the two nation's is wreaking havoc in global equity markets, with some investors speculating that a deal may not happen at all. Consumer spending accounts for more than two-thirds of US economic activity.
As China considers how to respond to higher US tariffs, Trump suggested that China would only be harming its own economy if the country responds with more punitive measures on American products.
"We need to see something much clearer and until we do, we have to keep our tariffs on", Kudlow said in an interview on "Fox News Sunday", adding: "We can't accept any backtracking".
Markets in Europe also extended losses, with the FTSE 100 down about 0.5%, while the main indexes in Frankfurt and Paris were more than 1% lower. The National Retail Federation says that the new tariffs are "bad news for almost every sector of the American economy - retail, farming, manufacturing and technology".
Lighthizer said a final decision on that has not yet been made but it would come on top of the Friday tariff rate increase to 25% from 10% on $200 billion worth of Chinese imports. This new round of tariffs will take effect on June 1. "Both sides will pay in these things".
Trump warned China not to intensify the trade dispute and urged their leaders to continue working to reach a deal. "I don't disagree with that", Kudlow admitted.
"If [the US] does not realise its mistake, it will create problems of a historic nature", he said.
May 17, 2019 is the deadline for President Trump to decide on imposing tariffs on vehicle imports from the EU. The move affected 5,700 categories of Chinese products including internet modems, routers and similar devices.
That was followed by China's early-May move to - according to us officials - backtrack on its agreement to enshrine concessions in law, offering instead to issue directives by the State Council.
China will elevate tariffs on US$60-billion in goods imported from the USA, the country's finance ministry said Monday night.
While praising Trump, Bannon slammed Treasury Secretary Steven Mnuchin, who's been personally involved in the negotiations with China.
The White House and U.S. Trade Representative's office did not immediately respond to requests for comment.
Trump has since defended the tariff hike and said he was in "absolutely no rush" to finalise a deal. That's because both sides will feel less pressure to do a deal if their economies and markets hold up.
Talks in Washington broke off on Friday without a deal, but both sides have indicated that future talks are likely.
Trump on Saturday took to Twitter to taunt the Chinese.
China could move beyond the goods trade and target services, particularly in the finance, tourism and cultural sectors, Wei said.
China's national security review process for foreign investments may have become more opaque as the country steps up its efforts to protect its economic security, a top agenda item for the current government.
State media also kept up a steady drum beat of strongly-worded commentary on Monday, reiterating that China's door to talks was always open, but vowing to defend the country's interests and dignity.
China could also place sanctions on U.S. planes and vehicles, he said, making it more hard for these products to enter the Chinese market.