China and the USA have raised tariffs on billions of dollars of each other's goods over complaints Beijing steals or pressures foreign companies to hand over technology.
China's top envoy called on the U.S.to remain "cool-headed" on Thursday as Washington threatened to raise the tariff rate on the next $200 billion of Chinese imports.
One person familiar with the internal deliberations said the U.S.is trying to secure certain concessions and if China agrees, it is possible the US would back off additional tariffs.
The review of the higher tariff is a request from President Donald Trump, who wants China to change its trade practices.
In response, the White House has established a comment period on the proposed tariffs, which includes public hearings where businesses can request exemptions.
"The president directed that I consider increasing the proposed level of the additional duty from 10% to 25%", Lighthizer had said.More news: Retailers Cash in on Sales Tax Holiday Weekend
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The list named more than 6,000 items worth $200bn in annual trade, including chemicals, textiles, minerals and consumer goods ranging from baseball gloves to frozen fish fillets.
So what does the Chinese side think of the U.S.'s proposed escalation?
He said: "Sixty per cent of Chinese exports to the United States are actually made by foreign companies, including American firms in China. If the United States takes further escalatory steps, China will inevitably take countermeasures and we will resolutely protect our legitimate rights", Chinese Foreign Ministry spokesman Geng Shuang told a regular news briefing. China responded by implementing its own penalties on USA goods. The United States is far and away the most popular place for such investment, given the size and liquidity of markets for US government debt and policies that are very friendly to foreign investors other financial assets and real estate.
Two Trump administration officials told reporters on a conference call that the USA president remains open to communications with Beijing and that through informal conversations the two countries are discussing whether a "fruitful negotiation" is possible.
Paulina Dedaj is a writer/ reporter for Fox News.
Several American companies, including General Motors, Harley-Davidson, and Whirlpool, have reported significant losses, which they base at least in part on the tariffs imposed by the Trump administration, or on the tariffs other nations imposed as retribution for Trump's tariffs.