The United States (US) stocks slid on Tuesday as escalating trade tensions between the United States and China triggered global growth fears and drove investors away from riskier assets.
"With the rapid escalation of the trade conflict with the USA, we believe Beijing will likely step up easing measures again", he wrote in a note.
The US tariff action would come in the middle of meetings between Liu and Trump's top trade officials in Washington.
In a subsequent tweet, he wrote: "Guess what, that's not going to happen". "We'll see, but I am very happy with over $100 Billion a year in Tariffs filling USA coffers", he added. In addition, statements by U.S. Treasury Secretary Steven Mnuchin and U.S. Trade Representative Robert Lighthizer this week accusing China of having reneged on commitments to revise the country's trade policies indicate a substantive disagreement rather than an 11th-hour bargaining maneuver. And China's retaliatory tariffs are inflicting pain on farmers, a key part of Mr Trump's political base.
A woman takes photo of a child near a promotion booth with the words "China Made" in Beijing Wednesday.
On Sunday, Trump threatened to ramp up levies on $200 billion worth of Chinese goods, increasing the rate from 10% to 25%, and set a 25% tariff on $325 billion of now untaxed goods, including many consumer products.
He added that the Chinese delegation would still be coming to Washington for trade talks, which will now begin tomorrow, a day later than previously scheduled.
Robert Lighthizer, the United States trade representative, accused China on Monday of reneging on what he described as "good, firm commitments on eliminating market-distorting subsidies".
Still, some investors may not want to get on the wrong side of the trade in the event a deal is hammered out as Chinese officials are in Washington this week to continue negotiations. "These taxes are not paid by foreign nations, and they result in higher costs that are simply passed on to the American consumer".
He also said any hope by the Chinese regime to renegotiate a future trade deal with a Democratic presidential administration would go unfulfilled.
The politically sensitive trade surplus with the USA remained large, widening to $21 billion last month from $20.5 billion in March.
Washington has demanded far-reaching and profound changes to the Chinese economy, such as submitting state enterprises to market principles, reducing massive subsidies and ending the alleged "theft" of USA technology. All 11 sectors were in the red, with information technology and industrials leading the drop because they stand to be burned in a protracted U.S.
But according to reports, usa officials have become frustrated by China's attempt to reword the draft agreement in its final stages.