* State tabloid says U.S. must respect China’s interests

* Says “no deal is fine” after U.S. President’s threats

* Negotiations set to resume Wednesday morning

SHANGHAI, July 31 (Reuters) - Negotiators from the United States should show “sincerity” and temper expectations as they begin a new round of talks with Chinese counterparts to ease trade tensions between the two sides, state-owned tabloid Global Times said on Wednesday.

U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin landed in Shanghai on Tuesday to resume talks aimed at resolving a trade war between the two sides. Negotiations are set to continue on Wednesday morning.

U.S. President Donald Trump accused China of backing off on a pledge to buy more U.S. agricultural products, warning on Tuesday that the outcome for China could be worse if it continues to stall.

Trump said on Twitter: “The problem with them waiting ... is that if & when I win, the deal that they get will be much tougher than what we are negotiating now ... or no deal at all.”

The Global Times accused “trade hawks” of refusing to consider China’s legitimate interests, adding that the U.S. side should hold “reasonable expectations” after making “unrealistic demands that infringe upon China’s sovereignty and dignity”.

It said that if “Washington still holds the illusion that Beijing will somehow cave in and compromise on issues concerning sovereignty and other related core interests to reach a deal, then no deal is fine”.

The U.S. negotiating team arrived for talks in Shanghai on Tuesday afternoon but amid tight security there was no sighting of Lighthizer or Mnuchin.

The U.S. and Chinese delegations were scheduled to have dinner at Shanghai’s historic riverfront Fairmont Peace Hotel, but both teams avoided the media and did not make public comments. (Reporting by David Stanway; Editing by Michael Perry)