Liu He, China's vice premier and top trade negotiator, will have dinner with President Donald Trump's trade team Thursday evening in Washington, just hours before the U.S. will hike tariffs on $200 billion in Chinese goods.
Liu will dine with U.S. Trade Representative Robert Lighthizer and other U.S. officials as the world's two largest economies try to salvage a trade deal, White House press secretary Sarah Huckabee Sanders said. Liu is not expected to meet with President Donald Trump on Thursday.
Markets will be watching for any clues or updates to leak out of the dinner. U.S. stock futures open at 6 p.m. ET. Stocks declined at the opening bell Thursday morning after Trump said during a Wednesday night campaign rally that China "broke the deal."
Investors have followed the talks closely as they hope the U.S. and China can avoid widening their trade conflict and damaging the global economy. Asked whether the White House — which closely watches financial markets — is prepared for the market reaction Friday if no deal takes shape, Sanders responded, "We're always prepared."
Liu will head into the talks no longer carrying the title of President Xi Jinping's "special envoy" — which suggests he has less leeway than before to make compromises, CNBC reported.
The U.S. has officially filed paperwork to raise duties on the Chinese products to 25% from 10% at 12:01 a.m. ET on Friday. While the Trump administration said it could reverse its decision if the sides make progress during talks Thursday, it is unclear whether Washington and Beijing can move close enough to a deal.
Trump first announced the tariff increase on Sunday as the U.S. accused China of reneging on key parts of the developing trade deal. The Chinese side reportedly felt Trump may be willing to make concessions, according to The Wall Street Journal.
Trump has pushed for an agreement to address grievances with China such as intellectual property theft, forced technology transfers and trade deficits. The Trump administration has already placed tariffs on $250 billion in Chinese goods and has threatened to levy duties on more products as it tries to bring Beijing to the table.
— CNBC's Eunice Yoon contributed to this report