United States stocks turn higher as anxious investors eye trade talks

Trump said he would increase the current 10 per cent tariff on US$200 billion worth of Chinese goods to 25 per cent on Friday

President Donald Trump tweeted Wednesday that Mr Liu still wanted to "make a deal" but late in the day China vowed to retaliate by taking "necessary countermeasures" should Mr Trump persist in more than doubling the tariffs on Friday.

Since past year, the two sides have exchanged tariffs on more than US$360 billion in two-way trade, gutting U.S. agricultural exports to China and weighing on both countries' manufacturing sectors.

Chinese state media on Thursday published and aired reports quoting US-based organisations and individuals critical of Trump's decision to raise tariffs, though playing down the impact of higher U.S. tariffs on the Chinese economy.

Reuters on Wednesday revealed the extent of the rift that has opened between the two countries, reporting that a draft trade agreement text sent by Beijing on Friday night was riddled with changes that marked reversals in Chinese commitments that undermined core US demands. "We'll see, but I am very happy with over $100 Billion a year in Tariffs filling USA coffers.great for United States, not good for China!"

"I think it'll be a very strong day", Trump said.

Vice-Premier Liu He will visit the United States on Thursday and Friday to attend the 11th round of the bilateral consultations on trade issues. "We've taken well over US$100 billion from China in a year".

The US president's threat to raise tariffs comes amid claims Beijing is trying to row back on a trade deal.

Washington has demanded far-reaching and profound changes to the Chinese economy, such as submitting state enterprises to market principles, reducing massive subsidies and ending the alleged theft of USA technology.

In each of the seven chapters of the draft, China had deleted its commitments to change laws to resolve core complaints that caused the United States to launch a trade war: Theft of U.S. intellectual property and trade secrets; forced technology transfers; competition policy; access to financial services; and currency manipulation.

The tariffs would target chemicals, building materials, furniture and some consumer electronics among other goods.

Benchmark U.S. crude fell 38 cents to $61.74 a barrel in electronic trading on the New York Mercantile Exchange.

Gao described accusations about Chinese firms stealing tech secrets as unreasonable and said they were not based on facts.

"We thought things would be moving forward, and then there were communications over the weekend that made clear to us we were going substantially backwards, and that's what led us to updating the President", the Treasury secretary said. The market is also in a position to finish higher for the week.

The S&P 500 index fell 4.63 points, or 0.2%, to 2,879.42. Analysts expected a gain. Gordan Chang, author of "The Coming Collapse of China", told Yahoo Finance Tuesday that in this case, "China has more to lose".

But imports from the United States declined by even more - nearly 26%, widening China's trade surplus with the United States. "The effects on business confidence and financial markets around the world could be more significant, potentially adding to reasons for renewed policy loosening".

The stock price of Korea's No. 2 chipmaker, SK hynix, dropped 5.35 percent from the previous session to 76,000 won ($64.35).

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