US, China upbeat on trade talks amid South China Sea tensions

An official said the two US guided-missile destroyers traveled within 12 nautical miles of Mischief Reef in the disputed Spratly Islands

An official said the two US guided-missile destroyers traveled within 12 nautical miles of Mischief Reef in the disputed Spratly Islands

Insisting that China "wants to make a deal very badly", Mr Trump said America has "never been in this position before" in negotiations with Beijing on trade.

Tensions between US President Donald Trump and China's leader Xi Jinping have escalated in recent months, costing both countries billions of dollars.

The move angered Beijing at a time when the USA and China ton are locked in a trade war and are negotiating a deal ahead of a March 1 deadline when USA tariffs on $ 200 billion worth of Chinese imports are expected to increase to 25 per cent from 10 per cent.

A round of talks at the end of January ended with some progress reported, but no deal and US declarations that much more work was needed. Officials have said March 1 is a "real deadline" for reaching a deal.

The question they are mulling is how to do that while maintaining pressure on China and the urgency that has accompanied the current discussions. Trump had said final resolution of the trade dispute would depend on the meeting with Xi "in the near future" but told reporters it had not yet been arranged. It's still possible the leaders may get together in March at Trump's Mar-a-Lago resort in Florida, Conway said Monday, when asked about a report from news agency Axios to that effect. "They will meet again soon".

A growing number of US businesses and lawmakers have expressed hopes for a delay in the tariff increase while the two sides tackle the hard USA demands for major structural policy changes by China aimed at ending the forced transfer of American trade secrets, curbing Beijing's industrial subsidies and enforcing intellectual property rights. It has also imposed a 10 percent tariff on another $200 billion of made-in-China goods.

China has lashed out at the United States in the wake of another "freedom of navigation" exercise conducted by the U.S. Navy in the South China Sea, accusing Washington of undermining "peace" and "security".

The warships were shadowed by Chinese assets, but the interactions were routine and uneventful, according to a separate USA official.

And with March 1 approaching, speculation is growing that it will be hard for negotiators to agree to the complete deal Trump demands.

Erin Ennis, senior vice president of the U.S. While the American side has expressed optimism, officials caution that there are still many large issues between the US and China.

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