The US imposed tariffs on more than $250 billion worth of Chinese goods.
The talks that started Monday were the first face-to-face meetings since Trump and his Chinese counterpart, Xi Jinping, agreed on December 1 to suspend further action against each other's imports for 90 days while they negotiate over USA complaints that Beijing steals or pressures companies to hand over technology.
"Listen, I think in the end markets are not really going to care very much about the details of any deal that's struck as long as a deal is struck and directionally looks like we are going toward deescalation rather than escalation", said Jimmy Pethokoukis, fellow at the American Enterprise Institute. But the shutdown may yet prevent Trump's appearance, according to a report in the Wall Street Journal.
"We urge the United States to immediately cease this kind of provocation", he said, adding that China had sent military ships and aircraft to identify and warn off the ship. "Uncertainty is bad for business". President Donald Trump and his deputies have criticized China for failing to live up to past promises, including a pledge to promptly open up the Asian nation's economy to more trade and investment after it joined the World Trade Organization in 2001. USA officials appear to want to maintain the pressure of tariffs, the official said.
A member of the U.S. delegation said the two sides would resume talks on Wednesday as they continue their first face-to-face meetings since Trump and Chinese President Xi Jinping agreed to a tariff truce during a meeting in Argentina on December 1.
The talks were initially scheduled to end on Tuesday, but extended past their deadline.
Meanwhile, the economic risks are growing.
That would not only squeeze corporate profitability at home, but also put pressure on global price gains, as export prices usually follow those at factory gate.
The discussions "went just fine", he said without elaborating.
The Chinese responded by slapping tariffs of $110bn worth of USA goods.
Websites belonging to Xinhua and People's Daily-the Chinese Communist Party's mouthpiece-both reposted an article by "Bull Piano", a popular social-media account that posts commentary on current affairs.
It softened its stand by offering a mix of concessions by resuming purchases of USA soybeans, suspended punitive tariffs on imports of United States cars and toned down its "Made in China 2025" plan, which aimed at breaking the country's reliance on foreign technology and pull its hi-tech industries up to western levels. Even if the current truce is made permanent and the tariffs are eventually rolled back, the damage to many companies may already be done. "I really believe they want to make a deal".
China's trade data for the full year of 2018 is due to be released on January 14, and economists see year-on-year export growth slowing in December from November. They include changes to China's policies on intellectual property protection, technology transfers, industrial subsidies and other non-tariff barriers to trade.
In a brief statement earlier, the ministry said the talks were extensive, and helped establish a foundation for the resolution of each others' concerns, but gave no details.
The 90-day time frame is a tight window in which to nail down deep changes to China's economic model, reforms which past USA administrations advocated for years and US lawmakers on both sides of the aisle support. Or, to use President Xi Jinping's words from a speech in December, "We will resolutely reform what should and can be reformed, and make no change where there should not and cannot be any reform".
Trade negotiations between US-China mid-level officials seem to have taken a favorable turn.