Washington has threatened to raise tariffs on $200bn worth of Chinese goods if Beijing does not meet demands by March 1.

Negotiators from China and the United States have begun senior-level talks in Beijing aimed at ending a major trade dispute between the world’s two largest economies.

Chinese state news agency Xinhua reported on Thursday that China’s Vice Premier Liu He met US Trade Representative Robert Lighthizer and US Treasury Secretary Steven Mnuchin.

The US had threatened to raise tariffs on $200bn worth of Chinese goods to 25 percent from 10 percent on March 1 if Beijing failed to agree to Washington’s demands to amend its trade practices.

But US President Donald Trump earlier this week said he was open to extending the deadline if the talks in Beijing progressed.

Speaking to reporters at the White House on Wednesday, Trump struck an optimistic tone ahead of the discussions in the Chinese capital.

“It’s going along very well. We’ll see what happens, but I think it’s going along very well… They’re showing us tremendous respect,” Trump said.

Trade war

Washington accuses Beijing of unfairly raising barriers to international competition and stealing proprietary company secrets to boost the technological expertise of its firms.

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China has offered to buy more US goods but is expected to resist making deeper changes to its economy.

China’s export-oriented economy is slowing and Beijing is under pressure to avert a full-blown trade war with the US

The US imposed tariffs of 25 percent on $50bn worth of Chinese goods last July, and 10 percent on another $200bn. China has retaliated with its own measures.

US stock prices have been rising in recent days in hopes of a resolution to the trade dispute. The S&P 500 stock index hit a 10-month high on Wednesday. But Margaret Yang, an analyst at CMC Markets in Singapore, said in a research note that US shares could fall “if the talks fail to yield satisfactory results for investors”.

The talks, which began with technical negotiations between lower-level officials from the two sides, are expected to conclude on Friday.