The Chinese team will arrive in the United States for trade negotiations after Trump's tariff threat

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A Chinese delegation will arrive in the United States this week for trade negotiations after President Donald Trump overturned the negotiations threatening new tariffs on Sunday, according to sources familiar with the issue.

One of the sources informed of the state of the talks said that the Chinese would send a smaller delegation than the group of 100 people originally planned. It is unclear whether Vice Premier Liu He would continue to lead this smaller group, an important detail if the team was traveling to Washington with the goal of concluding an agreement. Two senior officials of the administration described Liu as "the closest", given that he had been given authority to negotiate on behalf of President Xi Jinping.

The Beijing team would begin talks with American negotiators on Wednesday while the two largest economies in the world are pushing for a trade agreement. It is not clear if the talks will begin again on Wednesday.

The White House, the Treasury Department and the Office of the US Trade Representative did not immediately respond to requests for comment.

Chinese President Xi Jinping (C) sits with members of the Chinese delegation during a bilateral meeting with US President Donald Trump (not pictured) on the Mar-a-Lago Trump estate in Palm Beach, Florida on 7 April 2017.

Carlos Barria | Reuters

Trump said on Sunday that it will raise its tariffs by $ 200 billion of Chinese products to 25% from 10% on Friday. He added that he would "briefly" place the duties on the $ 325 billion Chinese assets currently not subject to tariffs.

By reorganizing a dormant trade war, Trump raised doubts that the Chinese delegation would participate in the talks as planned. As of last week, the American side has expressed optimism about announcing an agreement as soon as this week.

But in threatening new tariffs, Trump said that the trade agreement with China moved "too slowly" while "trying to renegotiate".

US equity markets initially collapsed on Monday after the Trump threat but recovered later in the day. The actions have once again recovered their losses following the report that the Chinese delegation was still planning to come to Washington.

"He's making an offer under the market and feeling a little better," said Art Cashin, director of operations at the New York Stock Exchange for UBS. "It's a small party, there would have been more than 100. But the fact that they are coming is important."

If Liu joins the talks, he is considered particularly important. If you do not participate, "the probability that the 25% increase in tariffs will be implemented by the United States will increase." On Friday, a team of Barclays economists wrote in a note Monday.

– CNBC's Patti Domm contributed to this report.

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