Trump says US prefers a ‘big deal’ with China but warns 'bad' outcome in Hong Kong would hurt trade talks

US President Donald Trump warned that if China does anything "bad" to quell protests in Hong Kong, trade negotiations with the US would suffer. PHOTO: EPA-EFE

WASHINGTON (BLOOMBERG, AFP) - US President Donald Trump said on Monday (Oct 7) that he would prefer to strike a comprehensive trade bargain with China, but warned that if Beijing does anything "bad" to quell protests in Hong Kong, trade negotiations with the United States would suffer.

"They have to do that in a peaceful manner," Mr Trump told reporters in comments days before top US and Chinese officials are due to resume trade talks in Washington.

A fresh round of Hong Kong protests remained small on Monday night as the city cleaned up from a chaotic weekend in which demonstrators battled with police, vandalised shops and paralysed swathes of the Asian financial hub.

With little sign that the two countries have made progress in bridging the distance between them, speculation has mounted in recent months that they may reach a deal which addresses only some of Washington's extensive grievances.

"I think it's not what we prefer at all. My inclination is to get a big deal," Mr Trump told reporters when asked if he could accept a partial agreement.

"We've come this far. We're doing well. I would much prefer a big deal and I think that's what we're shooting for," he added.

But he acknowledged that his preferred outcome is not certain.

"Can something happen? I guess. Maybe. Who knows. But I guess it's unlikely."

With eight days to go before the next round of punitive tariffs is due to hit, Beijing's top trade envoy Liu He will meet US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin from Thursday, Chinese state media reported on Tuesday.

The high-level Chinese delegation also includes commerce minister Zhong Shan, central bank governor Yi Gang and vice-minister of industry and information technology Wang Zhijun. Vice-minister for agriculture Wang Shouwen has also been added to the negotiating team after China last month announced that it had started buying US soybean and pork.

But the talks come amid rising tensions between the two countries, after the US Commerce Department on Monday blacklisted 28 Chinese entities that it says are implicated in rights violations and abuses targeting Uighurs and other mostly Muslim minorities in the Xinjiang region.

The move, which bars the named entities from purchasing US products, came after Washington banned technology giant Huawei and other Chinese firms from government contracts.

Mr Liu has said privately that he will make a proposal that makes no commitments, addressing the far-reaching reforms to Chinese industrial policy or subsides that Washington is seeking, Bloomberg reported on Sunday, citing an unnamed source.

Lower-level talks have been underway since last month. The discussions will focus on areas where Washington has made far-reaching demands since last year: intellectual property rights, the forced transfer of proprietary technologies, agriculture and enforcement, the White House statement said.

The next round of US tariff increases is set to take effect on Oct 15, as US duty rates on US$250 billion in Chinese goods rise to 30 per cent.

Mr Trump has claimed China's weakening economy puts Beijing under pressure to make a deal. But he also has said in recent months that Chinese officials are dragging their feet in hopes of continuing negotiations with another administration should Mr Trump fail to win re-election in 2020.

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