China overplayed its hand with Trump on trade, and it could cost them dearly

[LastManStanding]

Hong Kong (CNN)China and the United States were moving towards an agreement to end a months-long trade war when, suddenly, it all fell apart this week.

Now as negotiators scramble to resurrect the deal, revelations are emerging that indicate both sides appeared to think they had the other over a barrel. As a result, they pushed for more, setting the stage for a rapid escalation in tensions which undid session after session of hard-fought negotiations.

Over the weekend, US President Donald Trump promised to raise tariffs on $200 billion of Chinese goods, sending markets plummeting and wrong-footing Beijing, which did not issue an immediate response and muzzled state media from reporting on the threat.

On Wednesday, the Chinese government threatened to retaliate, as its top trade negotiator, Vice Premier Liu He heads to Washington for what was supposed to be among the last rounds of discussions with US trade envoy Robert Lighthizer and Treasury Secretary Steven Mnuchin.

"The escalation of trade friction is not in the interests of the people of the two countries and the people of the world," the Chinese Commerce Ministry said in a statement Wednesday.