But after weeks of optimistic statements by Trump and members of his administration about how trade talks were progressing, Trump abruptly escalated tariffs on $200 billion of Chinese goods last week and opened the door to even more - prompting Beijing to hit back Monday by raising the tariff rate on $60 billion of USA items.
China's finance ministry said that it will impose tariffs on a total of 5,140 U.S. products.
Going forward, however, the fallout from increased tariffs on Chinese goods will dampen global oil demand, as well as cause more stagnation in global growth, while Trump's indication that he could impose new tariffs on another $300 bn worth of Chinese goods could be severely damaging for global growth, especially still fragile emerging markets.
On Friday May 10, 2019 President Donald Trump imposed sanctions on $200 billion (€178 billion) worth of Chinese goods.
Washington wants Beijing to roll back government support for Chinese companies striving to become global leaders in robotics and other technology. Trump chose to increase the tariffs following what the USA called China's decision to renege on key parts of a developing deal. "We have a very good relationship", Trump said in remarks at the White House.
Trump's latest China trade comments brought to at least 30 the number of tweets or retweets he's issued about China or tariffs since May 10, the day they the last round of trade talks concluded. Economists say more might follow to reduce the risk of American tariff hikes. Instead, officials on both sides signaled that differences between the two sides would ultimately need to be resolved in direct talks between Trump and Xi.
The next US election is 18 months away. China has the resolution, courage, and confidence to rise to all sorts of challenges, they said.
"We're in terrific shape in order to correct 20 years plus of unfair trading practices with China", Kudlow said.
Under a process outlined by US officials, the new tariffs would not take effect until late June at the earliest.
Kudlow said Sunday there is a "strong possibility" Trump will meet with Xi at the G20 economic summit in Japan next month.
The move, widely expected after the United States last week raised tariffs on $200 billion in Chinese imports, heightened fears the world's two largest economies were spiralling into a no-holds-barred dispute that could derail the global economy.
Meanwhile, aircraft manufacturer Boeing later said it remained "confident" US-China trade talks would yield an agreement.
Wall Street stocks plunged on Monday, with losses on Nasdaq exceeding three per cent, after China announced it was ramping up tariffs on United States goods, escalating the year-long trade dispute.
Chinese foreign ministry spokesman Geng Shuang told a news briefing in Beijing that China would "never surrender to external pressure".
Economists have warned that the existing tariffs would hurt USA growth. China's retaliation on Monday is seen as raising the odds that the Trump administration will move forward with another round of tariffs.