President Trump said Thursday he would meet Chinese President Xi Jinping next month in hopes of finalizing a trade deal, even as a leading business group warned that China had offered nothing new to resolve several major stumbling blocks during two days of talks this week.
Trump’s decision to seize control of the negotiations raised the already high stakes in efforts to defuse a conflict between the world’s two largest economies.
Negotiators, who have yet to prepare a draft agreement, must in the next 30 days settle issues that have bedeviled U.S. and Chinese diplomats for years, if they are to leave the two presidents with a manageable to-do list for any head-to-head bargaining.
The president began the day tweeting about China, spoke twice with reporters in the Oval Office about the negotiations and then dispatched his chief negotiator and top economic adviser to field additional questions from the media.
The result was a flurry of contradictory messaging. The president suggested the talks might blow past his March deadline, and he cast doubt on the extent of an eventual agreement even as he subsequently insisted it would be “by far the largest trade deal ever made.”
“I think we can do it by March 1st. Can you get it down on paper by March 1st? I don’t know. I can tell you on March 1 the tariff on China goes to 25 percent,” he told reporters.
Technically, the tariff on $200 billion in imports from China increases at 12:01 a.m. on March 2.
“This is going to be a very big deal or it’s going to be a deal that we’ll just postpone for a little,” he added.
U.S. Trade Representative Robert E. Lighthizer (USTR) later said that there has been no discussion of breaching the deadline.
The president has not formally accepted the Chinese invitation to meet Xi, though his public remarks Thursday certainly leaned in that direction. Lower-level officials will continue working on an eventual agreement with Lighthizer and Treasury Secretary Steven Mnuchin, eyeing a mid-February trip to Beijing for further talks.
The president’s talk of meeting Xi, even as so much remains unresolved about the principal U.S. demands, left some observers fearing he would settle for a weak deal.
“The Chinese really offered nothing on these issues,” said one analyst who has talked with U.S. negotiators and spoke on the condition of anonymity to discuss confidential matters. “Every time the president is in front of an authoritarian leader, he wilts.”
After insisting for the past year that he would not settle for the half-measures that previous U.S. administrations had accepted, the president risks precisely that outcome: a partial deal that avoids grappling with the thorniest elements inthe Chinese state-led economic model.
Lighthizer declined to provide details of the talks but said they had made significant headway. “The United States is particularly focused on reaching meaningful commitments on structural issues and [trade] deficit reduction,” said a White House statement.
The two sides made progress this week on opening Chinese markets and securing greater intellectual property protections for foreign companies, according to Myron Brilliant, executive vice president and head of international affairs for the U.S. Chamber of Commerce, who had spoken to members of the U.S. delegation.
But the Chinese team offered nothing to break the deadlock over major elements of China’s economic model, including state subsidies, state-owned enterprises and forced technology transfer, he said.
Negotiators have yet to produce a “framework agreement or negotiating document,” which must be fleshed out before Trump sits down with Xi, Brilliant said.
The White House announced last month that Trump plans to meet in lateFebruary with North Korean leader Kim Jong Un. Vietnam has been discussed as a potential venue, so a stop to bargain with Xi could be added to the itinerary, some analysts said.
“It can’t be settled below that level,” William Reinsch, a former Commerce Department official, said of the U.S.-China trade spat. “Trump has become his own USTR, is determined to make the final decisions and wants the spotlight.”
Dennis Wilder, a former top China analyst for the CIA, said the Chinese are betting they can secure a better deal in direct leader-to-leader horse-trading.
For the United States, presidential involvement is needed to break the “bureaucratic logjam” between hard-liners such as Lighthizer and Trump advisers who fear the trade war’s impact upon the U.S. economy and financial markets, he said.
“Trump is the kind of guy who’s never going to accept that the deal is good enough unless he’s in the room cutting the deal,” Wilder said, calling a summit “the inevitable conclusion” of the trade conflict.
Wilder, who directed East Asian affairs for the National Security Council under President George W. Bush, suggested the two leaders could huddle on Hainan Island, off the southern Chinese coast.
The president is seeking structural changes in China’s state-led economic model as well as a major increase in the annual value of American goods purchased by Chinese customers. During an Oval Office meeting with Chinese Vice Premier Liu He, who headed the negotiating team from Beijing, Trump said China had agreed to buy 5 million metric tons of soybeans even before concluding a deal.
Still, China is resisting demands to overhaul its industrial policies.
Their meeting underscores the dialogue’s seriousness. During an earlier visit by Liu last year, Trump declined to meet with Xi’s close adviser, a slight that irritated Chinese authorities.
With just 30 days remaining before their deadline, Both countries have reasons to want a deal. China’s economy was slowing even before the U.S. tariffs began depressing demand for the country’s exports, so the trade war is making a difficult situation worse for Xi.
Trump, meanwhile, has seen his public approval ratings battered by the partial government shutdown and is said to worry about the tariff war’s impact upon U.S. financial markets. The Dow Jones industrial average remains about 8 percent below its October record high.
But the president insisted that he remains intent on a “very comprehensive transaction,” rather than a partial accord. Any deal that does not include China opening its markets for manufacturing and agricultural products to U.S. producers will be “unacceptable,” the president wrote.
“China’s representatives and I am trying to do a complete deal, leaving NOTHING unresolved on the table. All of the many problems are being discussed and will be hopefully resolved,” he wrote.