The United States and China will resume trade talks next week in Washington with time running short to ease their bruising trade war, but U.S. President Donald Trump repeated on Friday that he may extend a March 1 deadline for a deal and keep tariffs on Chinese goods from rising.
Both the United States and China reported progress in five days of negotiations in Beijing this week.
Trump, speaking at a White House news conference, said the United States was closer than ever before to “having a real trade deal” with China and said he would be “honored” to remove tariffs if an agreement can be reached.
But he added that the talks were “very complicated.”
White House Press Secretary Sarah Sanders said in a statement on Friday the two economic superpowers “will continue working on all outstanding issues in advance of the March 1, 2019, deadline.
“These detailed and intensive discussions led to progress between the two parties. Much work remains, however,” Sanders said about the Beijing talks.
She added that the two countries agreed to state any commitments they make in a memorandum of understanding.
U.S. duties on $200 billion in imports from China are set to rise to 25 percent from 10 percent if no deal is reached by March 1 to address U.S. demands that China curb forced technology transfers and better enforce intellectual property rights.
Same tariff rate
Trump, asked whether he would grant Beijing a 60-day extension to the deadline, said: “There is a possibility that I will extend the date. “But if I do that – if I see that we’re close to a deal or the deal is going in the right direction – I would do that at the same tariffs that we’re charging now, I would not increase the tariffs.”
Trump also said he would consider bringing top U.S. Democrats – House Speaker Nancy Pelosi and Senate Democratic leader Chuck Schumer – into the final stages of the talks to minimize their dissent with the deal. Spokespersons for the two lawmakers did not immediately respond to requests for comment.
The conclusion of the Beijing talks prompted optimism on Wall Street, where major stock indexes were broadly higher, led by financial services shares.
The U.S. China Business Council, which represents American companies doing business in China, applauded the announcement that the two sides would put specific language in a memorandum of understanding.
“Any agreement must be detailed, enforceable, time-bound, and result in market-access improvements that have a meaningful impact for American companies, workers, and farmers,” the group’s president, Craig Allen, said in a statement.
Chinese state news agency Xinhua said on Friday that China and the United States had reached a “consensus in principle” on some key issues, adding they had a detailed discussion on a memorandum of understanding on trade and economic issues. It gave no details.
The countries focused this week on technology, intellectual property rights, agriculture, services, non-tariff barriers and currency, and discussed potential Chinese purchases of U.S. goods and services to reduce a “large and persistent bilateral trade deficit,” Sanders said.
Meeting with Xi
Chinese President Xi Jinping met U.S. Trade Representative Robert Lighthizer and U.S. Treasury Secretary Steven Mnuchin on Friday after a week of talks at senior and deputy levels, and called for a deal both sides could accept, Chinese state media said.
After talks on Thursday, Mnuchin said on Twitter that he and Lighthizer had held “productive meetings” with Xi’s top economic adviser, Vice Premier Liu He.
“The consultations between the two sides’ teams achieved important step-by-step progress,” Xi said, according to state television.
“I hope you will continue efforts to advance reaching a mutually beneficial, win-win agreement,” Xi said at Beijing’s Great Hall of the People.
He added that China was willing to take a “cooperative approach” to settling bilateral trade frictions.
Lighthizer told Xi the senior officials had “two very good days” of talks.
“We feel that we have made headway on very, very important, and very difficult issues. We have additional work to do but we are hopeful,” Lighthizer told Xi in a pool video shown to foreign media.
‘A lot of distance’
Neither country has offered new details on how they might de-escalate the tariff war that has roiled financial markets and disrupted manufacturing supply chains.
Although Trump said this week that an extension of the tariff deadline was possible if a “real deal” was close, Larry Kudlow, director of the U.S. National Economic Council, has said the White House had made no such decision.
But several sources informed about the meetings told Reuters there was little indication negotiators had made major progress on sticking points to pave the way for a potential meeting between Xi and Trump in coming weeks to hammer out a deal.
“Stalemate on the important stuff,” said one source. All of the sources requested anonymity because the talks are confidential.
“There’s still a lot of distance between parties on structural and enforcement issues,” said a second source. “I wouldn’t quite call it hitting a wall, but it’s not a field of dreams either.”
A third source told Reuters the White House was “irate” over earlier reports that the Trump administration was considering a 60-day extension of the tariff deadline.
The most difficult and intractable issue involves the Trump administration’s desire to put meaningful restrictions on China’s ability to keep investing enormous sums of money from the government, and from government-affiliated financial institutions, in a wide range of advanced manufacturing sectors that compete with American industries. These include areas like commercial aircraft manufacturing, semiconductors and artificial intelligence.
Another challenge for negotiators is that both sides perceive national security as being at stake in some cases.
China has been reluctant to unblock internet access to its market for some of Silicon Valley’s biggest and most successful businesses, like Facebook and Google. It fears that without stringent censorship, everything from democratic ideas to pornography would be harder to fight.
The two sides have been struggling with more than 100 issues raised by the United States in a lengthy statement given to Chinese officials in May. In preparation for this week’s talks, the two sides had been unable to even agree on a draft framework for the broad outlines of a possible deal, so expectations for any comprehensive settlement had been low from the start.
Source: Reuters/CNBC/New York Times
Read the full White House statement:
This week, at the direction of President Donald J. Trump, officials from the United States traveled to Beijing to continue negotiations on the trade relationship between the United States and China. On the United States side, the talks were led by Ambassador Robert E. Lighthizer, the United States Trade Representative, and the Honorable Steven T. Mnuchin, the Secretary of the Treasury. On the Chinese side, the talks were led by Vice Premier Liu He. On Friday, both delegations had the opportunity to meet with President Xi Jinping regarding their discussions. The talks also featured extensive technical exchanges between the professional staffs of both countries.
These detailed and intensive discussions led to progress between the two parties. Much work remains, however. Both sides will continue working on all outstanding issues in advance of the March 1, 2019, deadline for an increase in the 10 percent tariff on certain imported Chinese goods. United States and Chinese officials have agreed that any commitments will be stated in a Memoranda of Understanding between the two countries.
During the talks, the United States delegation focused on structural issues, including forced technology transfer, intellectual property rights, cyber theft, agriculture, services, non-tariff barriers, and currency. The two sides also discussed China’s purchases of United States goods and services intended to reduce the United States’ large and persistent bilateral trade deficit with China.
Next week, discussions will continue in Washington at the ministerial and vice-ministerial levels. The United States looks forward to these further talks and hopes to see additional progress.