Washington demands a $200 billion cut in trade surplus and lower tariffs from Beijing, say sources.

The Trump administration has drawn a hard line in trade talks with China, demanding a $200 billion cut in the Chinese trade surplus with the U.S., sharply lower tariffs and advanced technology subsidies, people familiar with the talks said on Friday.

The lengthy list of demands was presented to Beijing before the start of talks on Thursday and Friday between top-level Trump administration officials and their Chinese counterparts to try to avert a damaging trade war between the world’s two largest economies.

A White House statement did not mention specific demands, but said the U.S. delegation “held frank discussions with Chinese officials on rebalancing the U.S.-China bilateral economic relationship, improving Chinas protection of intellectual property, and identifying policies that unfairly enforce technology transfers.”

IP theft

The delegation will brief Mr. Trump and “seek his decision on next steps,” the White House said, adding that the administration had “consensus” for “immediate attention” to change the U.S-China trade and investment relationship. Mr. Trump said he would meet with the delegation on Saturday. “We will be meeting tomorrow to determine the results, but it is hard for China in that they have become very spoiled with U.S. trade wins!” he said in a twitter post.

China’s state-run Xinhua news agency described the talks as “constructive, candid and efficient” but with disagreements that remain “relatively big.” Tariff threats have roiled stock markets in recent weeks, but the inconclusive outcome of the Beijing talks did little to stop a rally in U.S. shares prompted by jobs data that eased fears of faster Federal Reserve rate hikes. Stocks in Shanghai ended 0.5% lower while they fell 1.3% in Hong Kong.

Fairness in trade

Mr. Trump told reporters in Washington that he was determined to bring fairness to U.S.-China trade. “We will be doing something one way or the other with respect to what’s happening in China,” Trump said.

China during the meetings asked that the U.S. ease crushing sanctions on Chinese telecom equipment maker ZTE Corp , people with knowledge of the matter said. Washington’s demand for a $200 billion cut from China’s U.S. goods trade surplus doubles Mr. Trump’s previous request for a $100 billion cut. China had a record U.S. goods trade surplus of $375 billion in 2017.

China offered to increase U.S. imports and lower tariffs on some goods, including cars, according to the sources. But Beijing asked the U.S. to treat Chinese investment equally under national security reviews, refrain from new restrictions on investments and halt a proposal to impose 25% tariffs under its “Section 301” intellectual property probe. China also offered to reconsider anti-dumping duties on U.S. sorghum, according to a proposal it submitted.