Trump plans to meet Chinese leader Xi Jinping to resolve trade dispute

Trump plans to meet Chinese leader Xi Jinping to resolve trade dispute

31/01 - 12:06 - 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 personal control of the negotiations raised the already high stakes in efforts to defuse conflict between the world’s two largest economies. Negotiators, who have yet even to prepare a draft agreement, must in the next 30 days settle issues that have bedeviled U.S. and Chinese diplomats for years in order to leave the two presidents with a manageable to-do list for their head-to-head bargaining.

At the White House, the president suggested the talks might blow past his March deadline and he cast doubt on the extent of an eventual agreement. “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 1st 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.”

After insisting for the past year that they would not settle for the sort of half measures that previous U.S. administrations had accepted, Trump administration officials now risk precisely that outcome: a partial deal that avoids grappling with the thorniest elements in the Chinese state-led economic model.

The two sides made headway 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 this week are not expected to produce a “framework agreement or negotiating document,” which must be fleshed out before Trump sits down with Xi, Brilliant said.

“I don’t think we’re getting very far, not yet in these negotiations...We’re going to have to see more progress made,” he added.

The White House announced earlier this month that Trump plans to meet in late February with North Korean leader Kim Jong Un. Vietnam has been discussed as a potential venue, so adding a stop to bargain with Xi might work, 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.

Even as the president signalled a willingness to take personal control of the negotiations, a leading American business group insisted that additional progress was needed before the two leaders should meet.

Dennis Wilder, a former top China analyst for the Central Intelligence Agency, said the Chinese are betting they can secure a better deal in direct leader-to-leader horsetrading.

For the U.S., presidential involvement is needed to break the “bureaucratic logjam” between hardliners such as U.S. Trade Representative Robert Lighthizer and Trump advisors 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.

U.S. and Chinese diplomats are scheduled Thursday to conclude two days of talks aimed at a deal to avert an increase in U.S. tariffs on $200 billion in imports from China by a March 2 deadline.

“Meetings are going well with good intent and spirit on both sides,” Trump wrote. “China does not want an increase in Tariffs and feels they will do much better if they make a deal. They are correct.”

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. China has offered to accelerate orders for products such as American soybeans and liquefied natural gas but is resisting demands to overhaul its industrial policies.

Chinese Vice Premier Liu He, who heads the Chinese negotiating team, is scheduled to meet with Trump in the Oval Office later Thursday following the talks’ conclusion. The 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 self-imposed deadline, both countries have reasons to want a deal. China’s economy was slowing even before the U.S. tariffs began depressing demand for its 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.

A deal for additional Chinese purchases of American goods can be completed quickly. But some analysts say that securing an agreement addressing U.S. complaints about China’s alleged theft of trade secrets, forced technology transfer requirements for joint ventures and discrimination against foreign companies is difficult to imagine in the short time remaining.

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 are 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.

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