China says it is in ‘close communication’ with US as tariffs loom

China is in close communication with the United States on trade, its commerce ministry said on Thursday, declining to comment on possible retaliatory steps if Washington imposes more tariffs on Chinese goods this weekend.

The US is due to impose tariffs on almost $160bn of Chinese imports such as video game consoles, computer monitors and toys on Sunday.

US President Donald Trump is expected to meet top trade advisers on Thursday to discuss the move, sources told Reuters.

A decision to proceed with the levies could roil financial markets and scuttle US-China talks to end the 17-month-long trade war between the world’s two largest economies.

“The two sides’ economic and trade teams are maintaining close communication,” Gao Feng, spokesman at the Chinese commerce ministry, told reporters at a regular briefing.

The countries agreed in October to conclude a preliminary trade agreement but talks have failed to produce deals on agricultural purchases by China and rollbacks of existing tariffs imposed by the US.

Many analysts had expected a deal in the run-up to December 15.

Beijing has said it would retaliate if the US escalates the trade dispute.

In August, China said it would impose 5 percent and 10 percent in additional tariffs on $75bn of US goods in two batches. Tariffs on the first batch kicked in on September 1, hitting US goods including soybeans, pork, beef, chemicals and crude oil.

The tariffs on the second batch of products are due to be activated on December 15, affecting goods ranging from corn and wheat to small aircraft and rare-earth magnets.

China also said at the time that it will reinstitute on December 15 an additional 25 percent tariff on US-made vehicles and 5 percent tariffs on auto parts that had been suspended at the beginning of 2019.