Trump says he feels US-China trade talks 'going to be very successful'

President Donald Trump said on Monday he was optimistic about resolving the US trade dispute with China.

Speaking at a White House dinner, Trump noted that Treasury Secretary Steven Mnuchin, who was attending the event, returned from trade talks in China two weeks ago.

"He just got back from China. We'll let you know in about three or four weeks whether or not it was successful. ... But I have a feeling it's going to be very successful," Trump said.

Earlier, China imposed higher tariffs on a range of US goods, including frozen vegetables and liquefied natural gas, a move in retaliation to Washington's decision last week to hike its own levies on $200 billion in Chinese imports.

The prospect that the United States and China were spiralling into a no-holds-barred dispute that could derail the global economy has rattled investors and led to a sharp selloff on equities markets in the past week.

A gauge of global stocks shed a further 1.9% on Monday, its biggest one-day drop in more than five months. China's yuan currency fell to its lowest level since December and oil futures slumped.

Trump, who has embraced protectionism as part of an "America First" agenda, said he would talk to Xi at a G20 summit in late June.

US farmers are among those most hurt by the trade war, with soybean sales to China plummeting and US soybean futures hitting their lowest level in a decade. Trump said on Monday his administration was planning to provide about $15 billion to help farmers whose products might be targeted.

Steady drum beat

China said on Monday it planned to set import tariffs ranging from 5% to 25% on 5,140 US products on a $60 billion target list. It said the tariffs would take effect on June 1.

"China's adjustment on additional tariffs is a response to US unilateralism and protectionism," its finance ministry said. "China hopes the US will get back to the right track of bilateral trade and economic consultations and meet with China halfway."

In the middle of the negotiations last week, Trump hiked tariffs on $200 billion of Chinese goods to 25% from 10%. The move affected 5,700 categories of Chinese products, including internet modems and routers.

Sources have said talks stalled after China tried to delete commitments from a draft agreement that its laws would be changed to enact new policies on issues from intellectual property protection to forced technology transfers.

Beijing said on Monday it would never surrender to external pressure. Its state media kept up a steady drum beat of strongly worded commentary, reiterating that the door to talks was always open but vowing that China would defend its national interests and dignity.

State television said in a commentary the effect of the US tariffs on the Chinese economy was "totally controllable."

Trump has said he is in no rush to finalise a deal with China. He again defended the move to hike US tariffs and said there was no reason why American consumers would pay the costs.

Economists and industry consultants, however, maintain that it is US businesses that will pay the costs and likely pass them on to consumers.

US tariffs last year triggered retaliation by China, which imposed 25% levies on $50 billion worth of US products including soybeans, beef and pork and lower tariffs on a list of $60 billion in goods.

Goldman Sachs economists said in a research note new evidence showed the costs of Washington's tariffs on China last year had fallen entirely on US businesses and households, with no clear reduction in prices charged by Chinese exporters.

They said the effects of the tariffs had spilled over noticeably to the prices charged by US producers competing with goods affected by the levies.