The 21-year-old is said to be pushing for a move to Stamford Bridge following a falling out with Man United manager Ruben Amorim.
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According to The Telegraph, the two clubs are at an impasse, with Chelsea valuing Garnacho at £30 million, while United want £50m.
United have already dropped their asking price from £70m as they look to get the wantaway winger off their books this summer.
Chelsea will continue to push to get the deal done with Christopher Nkunku and Nicolas Jackson but expected to leave.