The U.S. and China have signaled hardening positions as theyprepare for high-stakes talks in Washington to try and avoid anescalation in a year-old trade war that has cast a long shadow overfinancial markets and the global economy.

China's top trade envoy, Vice Premier Liu He, is due to land inthe U.S. capital on Thursday afternoon and go immediately intodiscussions with President Donald Trump's top negotiator, RobertLighthizer. U.S. tariffs on some $200 billion in Chinese goods areset to increase to 25 percent just hours later, in a move thateconomists and businesses say risks being the most economicallyconsequential of all of Trump's tariff moves so far.