China has more to lose than the United States in the two nations' burgeoning trade dispute but Washington remains open to dialogue with its largest trading partner, a senior White House advisor said Tuesday.

Trade brinkmanship between Washington and Beijing continued late Monday when President Donald Trump threatened to put fresh duties on between $200 billion and $400 billion in Chinese imports.

The possible new duties, which could cover the lion's share of all of China's exports to the United States, were a response to retaliatory Chinese levies on up to $50 billion in US goods announced Friday.

With Wall Street sliding further into the red on Tuesday and nerves on edge among lawmakers in Trump's Republican Party, senior White House economic aide Peter Navarro defended the new trade policy.

"It's clear that China does have much more to lose," he told reporters, noting that China exported more than $500 billion to the US last year, far more than the $130 billion it imported from the United States.

Navarro reiterated Washington's accusations that China had used string of unfair practices — cyber-theft, state-sponsored corporate acquisitions, forced technology transfers and export restrictions — to target global dominance in advanced new industrial sectors.

"It is important to note here that the actions President Trump has taken are purely defensive in nature," Navarro said. "They are designed to defend the crown jewels of American technology from China's aggressive behavior."

These included aerospace, advanced rail and shipping, artificial intelligence, augmented reality, biotechnology, new energy vehicles, precision farming and robotics, said Navarro.

"These are the future of the world and of America and China cannot have 70 percent of production of these industries by 2025," he added, referring to a Chinese industrial development plan denounced by Washington.

Navarro said US officials planned to cushion against the blows to American industries and workers in the United States and present in China but declined to elaborate on any plans to help the US farming sector.

"President Trump will have the backs of all Americans who may be targeted by Chinese actions and with respect to the farmers in Iowa or any other state," Navarro said.

Efforts to convince Beijing to change its ways had so far failed despite several rounds of transpacific diplomacy, he added.

"Our phone lines are open. They have always been open," said Navarro.

"The fundamental reality is talk is cheap. Delay is expensive."

The question marks over Trump's trade policies
Washington (AFP) June 19, 2018 –

America's new protectionist trade policies make good on President Donald Trump's campaign pledges but come at significant risks. What are the strengths and weaknesses of his trade offensive?

– A longstanding trade beef –

On the campaign trail, Trump pledged to put "America First" and denounced free trade pacts as job killers destroying the American industrial base. With the approach of mid-term elections in November, Trump may be seeking to reassure his political base that he has kept his promises.

"Donald Trump is not constrained by the establishment," Edward Alden, a trade expert at the Council on Foreign Relations, told AFP. "He continues to puzzle foreign leaders but if you look at what he said during his campaign and for many years before that none of this is a surprise. He is doing precisely what he said he is going to do."

– What are its strengths? –

China accounts for about half of the soaring US trade deficit in goods (last year the goods trade gap with China stood at a record $375.2 billion). This leaves China far more exposed to Trump's tariffs than vice versa. Last year, the United States exported $130.4 billion in goods to China but imported $505.6 billion.

– What are the unknowns? –

By announcing tariffs on $50 billion in Chinese imports and threatening tariffs on up to $400 billion more, Trump is testing an unprecedented, no-holds-barred strategy whose consequences remain unknown.

"It will be challenging for both sides to find a way to de-escalate these tensions while saving face and before trade and investment flows between the two countries take a sizable hit," said Eswar Prasad, professor of trade policy at Cornell University.

Prasad says that given the damage that could occur, "there is still hope that the United States and China will pull back from the brink of an open trade war."

– What are the economic risks? –

The 25 percent US duties on $50 billion of Chinese goods and 10 percent on a further $200 billion — and counter-measures announced by China — could shave 0.3 percent of Chinese GDP growth and 0.2 percent from that of the United States between 2019-2020, according to Oxford Economics.

"It will not be easy for the US to identify $200 billion worth of Chinese imports that it can levy tariffs on without hurting US companies and/or consumers, given the strong involvement of US companies in a large share of China's exports to the US," Oxford's chief Asia economist Louis Kuijs said in a research note.

– Who supports this policy? –

Trump faces increasingly vocal opposition from across the political spectrum and business world, including from within his own Republican Party.

Texas Congressman Kevin Brady, chairman of the powerful House Ways and Means Committee, has expressed concern for industry, farmers, workers and consumers, which he says stand to be affected by Trump's trade policies.

– Are there foreign policy risks? –

Trump is relying on China's help to succeed in his efforts to de-nuclearize North Korea.

"He wants a personal relationship with the (leader) of North Korea. He announced he's made good progress. I think he feels he doesn't really need China at this point," said Alden.

Nevertheless, North Korean leader Kim Jong Un traveled Tuesday to China for the third time since March.

Kim briefed Chinese President Xi Jinping on his recent talks with Trump in Singapore, underscoring China's role in the effort to unwind North Korea's nuclear program.