The latest escalation in the trade war between the world's two biggest economies came shortly after Donald Trump tweeted a warning to China not to retaliate against the extra tariffs he imposed last week on imports to the US.
It is the threat to impose tariffs on the $300 billion or so remaining imports from China that cause the greatest concerns.
Here are four reasons why Holtz-Eakin, the former director of the U.S. Congressional Budget Office and current president of the American Action Forum, believes Trump's approach could backfire.
The tensions reverberated through global financial markets, with the yield curve between three-month U.S. Treasury bills and 10-year notes inverting for the second time in less than a week on Monday.
The abruptness of Trump's tariff announcement made companies see doing business in China as more uncertain, said Parker of the U.S.
Sources have said talks stalled after China tried to delete commitments from a draft agreement that its laws would be changed to enact new policies on issues from intellectual property protection to forced technology transfers.
The latest round of US-Chinese trade negotiations ended in Washington on Friday without a deal. "China should not retaliate-will only get worse", Trump said on Twitter. However, his Economic Adviser Larry Kudlow said in an interview that both sides would suffer as a result of the new trade restrictions.
"It's US businesses and USA consumers who pay, correct?' asked 'Fox News Sunday" host Chris Wallace. He added that USA tariffs would remain in place while negotiations remain.
Trump has said he is in "no rush" to finalise a deal with China.
Earlier on Monday, the United States president said China would be "hurt very badly" if the country did not make a deal with the US.
The S&P 500 on Friday racked up its worst weekly decline since December, as Washington raised tariffs on Chinese goods worth US$200 billion to 25 per cent from 10 per cent.
They added that the effects of the tariffs had spilled over noticeably to the prices charged by US producers competing with goods affected by the levies. But they are also anxious an escalation to cover all trade from China and the Chinese retaliation it would provoke would do far more damage and could even tip the USA economy into recession. Not only has the US not provoked China over trade, but Washington is also decades late in trying to level the trade playing field.
The sell-off that sank U.S. stocks and global commodities spilled into Asia after China retaliated with higher tariffs on a range of American goods.
The president of the National Farmers Union has called President Donald Trump's plan to offer farmers $15 billion in subsidies a "temporary" solution that would not address the "permanent damage" created by the trade war with China. "We have the confidence and the ability to protect our lawful and legitimate rights". "It is no big deal".
Trump's meeting with Xi will most likely focus on trade.
"What that means for soybean growers is that we're losing", Davie Stephens, president of the American Soybean Association, said in a statement.
Some of the biggest chipmakers in the USA lean heavily on China for their sales, making them particularly vulnerable to the worsening tensions between the two countries.