China and the United States have been grappling with a trade war for a year and a half and have been clashing diplomatically in recent months over the situation in Hong Kong, a Chinese autonomous territory shaken by demonstrations for democracy.

Chinese President Xi Jinping said on Friday that China wants to reach a preliminary trade deal with the United States, but would "retaliate" for new US sanctions.

"We will retaliate if necessary but we are actively working to try to avoid a trade war," Xi told reporters in Beijing before former US officials and other foreign officials. "We want to work towards a preliminary agreement, based on mutual respect and equality," he said.