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A barge pushes a container ship to the dockyard in Qingdao in eastern China's Shandong province.

US President Donald Trump's increased tariffs on $200 billion (€178 billion) of Chinese goods entering the United States took effect on Friday.

The US imposed a 10% tariff on $200bn worth of Chinese products - including fish, handbags, clothing and footwear - past year.

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

The latest increase extends 25% USA duties to a total of $250 billion of Chinese imports.

Analysts say the Chinese are still willing to negotiate to retain the moral high ground and because they recognise the importance of solving the trade war. The White House statement said they also had a working dinner with Liu, who is leading the Chinese side.

China's Commerce Ministry expressed its "deep regret" and warned that Beijing will not "capitulate to any pressure".

While Trump on Wednesday insisted that Liu was coming to make a deal and dubbed him a "good man", he later told a rally of supporters that China "broke the deal" by backsliding on prior commitments, leading him to order higher tariffs.

It comes as high-level officials from both sides are attempting to salvage a trade deal in Washington.

"It's possible to do it", Trump said.

European stock futures point to gain of 0.5-0.6 percent in European stocks, which closed on Thursday before Trump's comments about receiving a "beautiful" letter from Chinese President Xi Jinping.

The renewed tensions roiled global stock markets this week and unnerved exporters caught off guard.

MSCI's broadest index of Asia-Pacific shares outside Japan, which dropped more than 1 percent early Friday, remained where they were when tariff increase kicked in, up 0.3%.

Mr Lighthizer released an official notice on Wednesday that duty rates on a vast array of Chinese-made electrical equipment, machinery, vehicle parts and furniture would jump to 25 percent on Friday.

"China sets great store on trustworthiness and keeps its promises, and this has never changed", Chinese Ministry of Commerce spokesman Gao Feng (高峰) told reporters in Beijing yesterday.

For 10 months, China has been paying Tariffs to the United States of America of 25% on 50 Billion Dollars of High Tech, and 10% on 200 Billion Dollars of other goods.

That could effectively provide a grace period for the sides to avert serious escalation.

"It was their idea to come back" and resume discussion ahead of the Friday deadline for additional tariffs, the president said.

When the talks began last year, it appeared that the Chinese might try to appease Trump by agreeing to buy lots of American products - especially soybeans and liquefied natural gas - and put a dent in America's massive trade deficit with China, a whopping $379 billion last year.

The US has banned federal agencies from using Huawei technology and has done everything in its power to convince allies to bar Huawei, ZTE, and other Chinese firms from bidding on 5G contracts, to the point of threatening the United Kingdom with ejection from the Five Eyes intelligence sharing network if they awarded a contract to Huawei. But Scott Kennedy a trade expert at the Center for Strategic and International Studies said China had misjudged the Americans' eagerness to cut a deal at all costs.

To keep pace with Trump's planned escalation, Beijing may use other weapons, including state-backed boycotts of American products, tighter customs inspections and intensified tax audits of U.S. companies, Krueger said.

While US companies complain of lost export markets, disrupted supply chains and higher costs, the US continues to see steady growth and falling unemployment.


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