Washington Insider US, China Trade Talks Likely Soon

There is a lot of uncertainty in Washington this week, but Bloomberg says the next meeting between President Donald Trump and Chinese President Xi Jinping will be soon -- as U.S. officials are seen gathering in Beijing this week. The administration noted that Trump still wants to meet Xi in an effort to end the trade war, a sign of optimism as negotiators from the world's two-biggest economies start their latest round of talks this week. "He wants to meet with President Xi very soon," White House adviser Kellyanne Conway said Monday. "This president wants a deal. He wants it to be fair to Americans and American workers and American interests." Still, Bloomberg noted that "uncertainty whether the leaders will meet to finalize an agreement" has stoked concerns that negotiations are faltering as the March 1 deadline approaches. If there's no deal by then, President Trump has threatened to more than double the rate of tariffs on $200 billion in Chinese imports. In preparatory meetings this week, U.S. officials will be pressing China to commit to deeper reforms to their state-driven economic model. Mid-level officials have already begun discussions ahead of two days of talks starting Thursday involving U.S. Trade Representative Robert Lighthizer, Treasury Secretary Steven Mnuchin and Chinese Vice Premier Liu He. Aides to Trump say this week's talks are important to demonstrate credible progress to both the president and financial markets. But the two sides are only just starting the work of drafting a common document and still tussling over how a deal may be enforced, which U.S. officials have repeatedly called a crucial element. As a result, some aides privately acknowledge the most likely scenario is for the March 1 deadline to be extended, delaying the threatened increase in tariffs on some $200 billion in Chinese imports. To maintain pressure on the Chinese side, some officials are pushing for a "limited" extension and are eager not to let the timing of a Trump/Xi meeting to close the deal slip much past the end of March. Many Chinese favor such an extension and some are optimistic about it, Bloomberg says. "I think there will be positive outcomes from this round of trade talks, because the two sides have shown willingness to seek a deal," said Wei Jianguo, a former vice commerce minister and now vice director of China Center for International Economic Exchanges in Beijing. "Even if no deal is reached in this round of talks, I don't think tariffs will be hiked on March 1. The highest possibility is that the U.S. will agree to postpone the deadline, buying time for the two leaders to meet and sign off on the final deal." The president told reporters in January that he planned to meet Xi in late February. He backtracked on that last week, saying "a gathering wouldn't take place this month." It's still possible the leaders may get together in March at Trump's Mar-a-Lago resort in Florida, Kellyanne Conway said. "He [the president] has forged a mutually respectful relationship with President Xi," Conway said. "They will meet again soon." The last round of talks in Washington late last month resulted in China importing additional American soybeans and other U.S. goods — a move that provides some relief to U.S. farmers. However, there has been no breakthrough on the structural issues separating the two nations, such as industrial policy, government subsidies, protection of intellectual property or forced transfers of technology. Facing an economic slowdown at home, the Chinese government has a strong motivation to address American demands and put an end to the trade war, some think. China has fast-tracked approval of a law that would ban theft of intellectual property and forced technology transfers, but the question is how much more it can compromise. With the U.S. now pushing a plan of prioritizing spending on artificial intelligence research, it will be difficult to talk China out of its policies to dominate advanced technologies. Both sides are under pressure to avoid additional trade restrictions and the political stakes are growing as the nest election cycle approaches. This is a fight with very high stakes for U.S. producers that should be watched closely as it intensifies, Washington Insider believes.