Sanders told reporters earlier on Wednesday that the White House has gotten "indications" the Chinese delegation coming to Washington wants to make an agreement, following Trump's tweet this morning saying China still wants to cut a deal.
The Chinese Commerce Ministry said that if the USA tariff measures are implemented, it would take "necessary countermeasures".
The retrenchment in the talks has come as a surprise to businesses and investors, who believed that the two countries were headed toward a deal that would open Chinese markets to American business, require China to protect intellectual property and result in large purchases of U.S. products.
Some in the USA and China speculated on Sunday and Monday that Trump's Sunday tweets might be just an empty threat meant to give US negotiators additional leverage in the talks.
Reuters has since reported on May 8, citing government and private sector sources, that Beijing backtracked on its commitments to change its laws to address core us concerns, including theft of usa intellectual property, forced technology transfers, and currency manipulation.
The US and China have moved to within 36 hours of a full-scale trade war after Washington published a list of imported products that will face higher tariffs from Friday.
Investors previously expected Beijing and Washington to be close to sorting out a trade deal after months of negotiations.
United States officials accused Chinese negotiators of reneging on commitments made during months of talks.
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US stock markets continued to show high anxiety Tuesday after a volatile Monday amid simmering U.S. The blue chip index was down 2.2% in afternoon trading. Because of the exchange of tariffs in their trade war, their people have also suffered from increased consumer prices.
Mr Trump's tough stance on China has won plaudits from both the American left and the right, but the rare bipartisan support also makes it politically hard for him to accept any watered-down deal.
US Trade Representative Robert Lighthizer released an official notice Wednesday that duty rates on a vast array of Chinese-made electrical equipment, machinery, auto parts and furniture would jump to 25% after midnight on Friday. China too slapped reciprocal tariffs on some USA exports to the country.
"There's no question that some of the trade policies helped in the GDP number", Mnuchin said.
On Sunday Mr Trump said on Twitter the USA would more than double tariffs on $200bn (£152bn) of Chinese goods on Friday and could introduce fresh tariffs.
However, economists and even Trump's fellow Republicans in Congress, stress that USA importers and consumers are the ones that pay the price for higher tariffs.
Despite the trade war, the value of USA imports of Chinese goods have continued to rise, widening the soaring trade deficit with China.
Before then a resumption of the trade war would have serious implications from the global economy.