Trade tensions escalate as the US and China barrel toward tariff hikes

• The US and China have seen trade tensions rise rapidly in recent days.
• That has cast uncertainty on whether the world's largest economies would be able to stave off planned tariff escalations set to take place next week.
• The scheduled escalation would lead to tariffs as high as 30% on Chinese products.
• Visit Business Insider's homepage for more stories.

The US and China have seen trade tensions rise rapidly in recent days, casting uncertainty on whether the world's largest economies would be able to stave off planned tariff escalations set to take place next week.

On Thursday and Friday, the two sides are set to hold the first high-level trade discussions on US soil since they fell apart in May. But a series of escalations have unfolded ahead of the thirteenth round of negotiations, which were expected to offer a last-ditch attempt to avoid tariff rates as high as 30% after October 15.

The US added 28 technology companies in China to an export blacklist late Monday over alleged human rights abuses in the Xinjiang region. Chinese Foreign Ministry spokesman Geng Shuang was swift to push back against the action and suggest retaliation.

"We urge the US to immediately correct its mistake, withdraw the relevant decision and stop interfering in China's internal affairs," Geng said at a press conference. "China will continue to take firm and forceful measures to resolutely safeguard national sovereignty, security and development interests."

The Trump administration has also moved forward with discussions on ways to limit investment flows into China, according to a source familiar with the matter. Bloomberg first reported the plan, which was disputed by the White House and the Treasury Department but has been confirmed by several news outlets including Business Insider.

"The chances of these talks yielding any sort of deal was already amazingly small," said Scott Kennedy, a senior adviser at the Center for Strategic and International Studies who studies China. "This possible step just adds to the growing pile of reasons why the Chinese have little incentive to make substantial concessions."

President Donald Trump has publicly vacillated between the prospect of a prolonged dispute with China and optimism toward a deal. Against the backdrop of a rapidly-evolving impeachment inquiry that was opened last month, the president could face increasing pressure to scale back tariffs that could alter the calculus of his reelection bid.

"China is also coming here on - their representatives - they're coming on Thursday and Friday," Trump told reporters Monday in the Roosevelt Room. "As to whether or not we make a deal, I don't know. But there's certainly a good possibility."

China has increased American agricultural purchases ahead of this week's meetings between Trade Representative Robert Lighthizer, Treasury Secretary Steven Mnuchin and a Chinese delegation led by Vice Premier Liu He in Washington. Soybeans have been at the center of trade negotiations since China halted imports of them last year.

But the Trump administration has struggled to win concrete concessions from China on issues that ignited the trade dispute more than a year ago, including intellectual property theft and the forced transfer of foreign technology. The two sides will continue to discuss those topics this week, according to a statement from the White House, along with services, non-tariff barriers, agriculture, and enforcement.

"There is no chance of a comprehensive deal, but there hasn't been any chance since May," said Derek Scissors, a China scholar at the right-leaning American Enterprise Institute.