Washington, May 17 (AFP) US Treasury Secretary Steven Mnuchin will lead trade talks with China due to take place today and tomorrow as the countries try to head off a trade war.

"These meetings are a continuation of the talks held in Beijing two weeks ago and will focus on re-balancing the United States-China bilateral economic relationship," the White House said in a statement.

The US has threatened to impose 25 per cent punitive duties on up to USD 150 billion in Chinese goods while China has targeted USD 50 billion in American exports.

China's Vice Premier Liu He leads the trade delegation from Beijing. US Commerce Secretary Wilbur Ross and US Trade Representative Robert Lighthizer also will participate.

The talks, part of a busy week of trade negotiations and tight deadlines, have become enmeshed in political intrigue after an adviser to President Donald Trump who is considered a hardliner on China was left out.

Peter Navarro, who was seen as having a more dominant role with the departure of White House economic advisor Gary Cohn over trade issues, was left off the list, although the statement said "Additional senior Administration Officials will also participate." According to press reports, Navarro sparred with Mnuchin over his handling of the China talks and was barred from attending the meetings this week.

Meanwhile, Trump yesterday denied caving to China over US sanctions on the telecoms equipment maker ZTE.

The comments followed Trump's surprise announcement on Sunday that the administration was exploring ways to soften the blow from a ban on exporting crucial US technology to the company, which Washington says violated sanctions and misled US officials.

"Nothing has happened with ZTE except as it pertains to the larger trade deal," Trump said on Twitter.

"China has seen our demands. There has been no folding as the media would love people to believe. The meetings haven't even started yet!" However, Ross has said twice in the past week that the two sides had exchanged detailed lists of demands. (AFP) CK

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