Trump Suggests ‘Signing Summit’ With Xi as China Talks Advance
(Bloomberg) -- President Donald Trump raised the prospect that he could sign a new trade deal with his Chinese counterpart Xi Jinping, as both sides expressed optimism that substantial progress is being made toward ending the trade war between the world’s two biggest economies.
“It looks like they will be coming back quickly again,” Trump told reporters Monday, referring to the possibility of Chinese negotiators returning after a week of talks on trade. “We are going to have a signing summit, which is even better,” he said, adding: “We are getting very very close.”
However, the president promptly tempered his enthusiasm, noting that a deal “might not happen at all.”
Trump’s hint at a deal-clinching summit with Xi underscores the sense that the two nations are approaching an agreement, more than seven months since the U.S. first imposed tariffs on Chinese imports, setting off a tit-for-tat conflict that has cast a cloud over the global economy. But with Trump set to hold another summit with North Korean leader Kim Jong-Un this week, a diplomatic effort in which China will play a critical role, the risk of a setback remains significant.
Trump said over the weekend that he’ll extend a deadline to raise tariffs on Chinese goods beyond this week, citing progress in the latest round of talks that wrapped up Sunday in Washington.
“The U.S. has made substantial progress in our trade talks with China on important structural issues including intellectual property protection, technology transfer, agriculture, services, currency, and many other issues,” Trump said in a Twitter posting. “As a result of these very productive talks, I will be delaying the U.S. increase in tariffs now scheduled for March 1.”
If the sides make further headway in negotiations, Trump said he and Xi would meet at his Mar-a-Lago resort in Florida to conclude the agreement, though he didn’t offer any details on when the meeting might be or how long he expects the tariff extension to last. Xi would be unlikely to be able to leave China before the end of the annual “Two Sessions” meetings, which are due to finish in the middle of March.
U.S. equities opened higher Monday as investors expressed optimism on trade, tracking stock gains in Europe and Asia. The Dow, Nasdaq and S&P all climbed, while the trade headlines boosted carmakers in Europe, fueling an advance in the Stoxx Europe 600 Index.
Pushing back the March 1 deadline to more than double U.S. tariffs on some $200 billion of Chinese goods will help soothe investor worries that a ratcheting-up of the trade war would derail a global economic expansion that’s already showing signs of softening. The U.S. Trade Representative’s office plans to issue a formal order this week to delay the rise in tariffs.
The latest round of U.S.-China trade talks was supposed to end Friday, but China’s Vice Premier Liu He extended his visit to Washington into the weekend.
The latest round of negotiations produced an agreement on a currency provision, according to Treasury Secretary Steven Mnuchin, who didn’t elaborate on its details. Bloomberg News reported earlier that the U.S. was asking China to keep the value of the yuan stable to neutralize any effort to soften the blow of U.S. tariffs.
Still, the negotiating teams hadn’t struck a deal as of late Saturday on how to monitor any currency pact. The Trump administration has said it will insist on strong enforcement measures as part of any deal after complaining that Beijing failed to act on past reform pledges.
There is a lot of skepticism in the U.S. that China will live up to promises it makes. Oregon Senator Ron Wyden called for any deal to be shared publicly with Congress before it was agreed, so “we can judge whether it amounts to a better deal than the status quo or simply reheats the leftover promises made to prior administrations.”
“Trump wants a deal, not a war,” as his time is running short with the 2020 election on the horizon, according to Gene Ma, chief China economist at the Institute of International Finance. “I expect Beijing will offer a longer shopping list, no yuan devaluation, better intellectual property rights protections, and fewer forced-joint ventures.”
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