The young Reds suffered defeat at a rain-soaked Kirkby Academy in their second match in the group phase of the competition.
Cole Palmer broke the deadlock in the 45th minute before City took control of the affair with second-half goals from James McAtee, Alex Robertson and a trialist.
In testing conditions, the match sprung into life in the 21st minute. Liverpool goalkeeper Jakub Ojrzynski did brilliantly to deny Samuel Edozie after the City No.11 broke into the penalty area.
Liverpool went up the other end as James Norris tested the alertness of Ciaran Slicker before Tyler Morton saw his acrobatic bicycle kick claimed by the City stopper.