By Lingling Wei 

China scotched trade talks with the U.S. that were planned for the coming days, according to people briefed on the matter, further dimming prospects for resolving a trade battle between the world's two largest economies.

The decision to pull out of the talks follows the latest escalation in trade tensions.

On Monday, President Trump announced new tariffs on $200 billion in Chinese imports, prompting Beijing to retaliate with levies on $60 billion in U.S. goods. Mr. Trump then vowed to further ratchet up pressure on China by kicking in tariffs on another $257 billion of Chinese products.

Chinese officials have said they wouldn't bend to pressure tactics. By declining to participate in the talks, the people said, Beijing is following up on its pledge to avoid negotiating under threat.

"Nothing the U.S. has done has given any impression of sincerity and goodwill," Chinese Foreign Ministry spokesman Geng Shuang said at a news briefing Friday. "We hope that the U.S. side will take measures to correct its mistakes."

The latest exchange of tariffs, which take effect this coming Monday, brings China and the U.S. closer to a full-blown trade war.

Still, Beijing is leaving open the possibility of engaging in fresh negotiations with Washington next month, said the people familiar with the matter.

Treasury Secretary Steven Mnuchin sent an invitation to Vice Premier Liu He, President Xi Jinping's economic czar, two weeks ago asking for a fresh round of talks this month.

Previous negotiations had ended without any breakthroughs.

Trump officials perceived the offers from Beijing -- largely involving more Chinese purchases of U.S. agricultural and other products -- as inadequate in addressing the White House's demand for a fairer playing field for American businesses in China.

Originally, Vice Commerce Minister Wang Shouwen, who led China's negotiating team in the last round, was to again lead a group for the talks in the U.S. and then Vice Premier Liu himself would follow up with a trip to Washington on Sept. 27 and Sept. 28. Both of those trips have now been called off, the people said.

"There are no meetings on the books right now," a senior White House official said Friday. "The President wants us to continue to engage to try to achieve a positive way forward, but it does take China to come to the table in a positive way."

Whether the two countries resume high-level trade negotiations could shape the path of future tariffs threatened by the Trump administration. People familiar with the administration's plans have said Mr. Trump is expected to issue a formal statement to begin the process of crafting the next tranche of tariffs that, if fully implemented, would cover virtually all U.S. imports of Chinese goods, which totaled $505 billion in 2017.

While the threat of more tariffs might intensify the rhetorical pressure on Beijing, these people have said, the actual administrative process -- including holding public hearings, receiving written public comments and conducting internal impact studies -- would take weeks before any fresh measures would take effect.

With the new tariffs imminent and the threat of possibly more coming, Chinese officials in recent days have questioned whether now is the time to negotiate. Many in China's policy circles believe that Beijing should wait to negotiate until after the U.S.'s November midterm elections. They say Mr. Trump isn't ready to cut a deal and is bashing China now to appeal to his political base, though he may be more amenable after the elections.

Meantime, Beijing is hoping that a possible summit in late November, around the time of the Group of 20 meetings, could provide an opportunity for both sides to reach a settlement. To prepare for the potential top-level meeting, Chinese officials are still looking for ways to restart negotiations, the people said. "The matter might be revisited in October," one of the people said.

So far, Beijing's strategy has been to respond forcefully to the Trump administration's trade offensive. But because China imports less from the U.S. -- just under $130 billion last year -- than vice versa, Beijing is running out of products to penalize. If Beijing moves to retaliate by targeting American businesses operating in China, as some officials have proposed, the country's leadership runs the risk of souring the foreign-investment environment and causing foreign capital to flee at a time the Chinese economy is slowing.

That is why President Xi has also ordered his officials to keep engaging with Washington and U.S. businesses, according to Chinese officials and government advisers. For instance, Mr. Liu in recent weeks has gone out of his way to reassure U.S. companies that there won't be retribution against them.

So far, the trade conflict has had limited impact on the Chinese economy. Many government advisers and economists expect growth to tick down in the coming months as a result of weakening Chinese exports and higher unemployment rates. "The trade war will affect China's transition toward higher-quality growth," said Wang Yiming, vice president of the State Council's Development Research Center.

Vivian Salama contributed to this article.

Write to Lingling Wei at lingling.wei@wsj.com

(END) Dow Jones Newswires

September 22, 2018 00:23 ET (04:23 GMT)