The new hard line taken by China in trade talks — surprising the White House and threatening to derail negotiations — came after Beijing interpreted recent statements and actions by President Trump as a sign the U.S. was ready to make concessions, said people familiar with the thinking of the Chinese side.
High-level negotiations are scheduled to resume Thursday in Washington, but the expectations and the stakes have changed significantly. A week ago, the assumption was that negotiators would be closing the deal. Now, they are trying to keep it from collapsing.
Read: Trump on trade talks with China: ‘They broke the deal’
The hardened battle lines were prompted by Beijing’s decision to take a more aggressive stance in negotiations, according to the people following the talks. They said Beijing was emboldened by the perception that the U.S. was ready to compromise. In particular, these people said, Trump’s hectoring of Federal Reserve Chairman Jerome Powell to cut interest rates was seen in Beijing as evidence that the president thought the U.S. economy was more fragile than he claimed.
Beijing was further encouraged by Trump’s frequent claim of friendship with Chinese President Xi Jinping and by Trump’s praise for Chinese Vice Premier Liu He for pledging to buy more U.S. soybeans.
An expanded version of this report appears on WSJ.com.
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