Despite hopes that a U.S.-China trade deal is at hand, President Trump said Thursday that some key issues have yet to be resolved and that they are not close enough for him to announce a summit with Chinese President Xi Jinping.
Trump said that he should know “over the next four weeks” whether there is summit or not, quelling speculation throughout the day that he was ready to name the date of a meeting with Xi.
“If we have a deal, we’ll have a summit,” he said. Now a summit could come closer to the end of May, or possibly June, when Trump and Xi are expected to attend a global leaders’ summit in Japan.
The president spoke during an Oval Office meeting with Chinese Vice Premier Liu He and the Chinese delegation that arrived this week for the latest round of talks with the American team, led by U.S. Trade Representative Robert Lighthizer.
The two sides met last week in Beijing, and negotiations have picked up recently amid indications that they are making solid progress in an effort to end a yearlong trade conflict between the world’s two biggest economies.
“Some of the toughest things have been agreed to,” Trump said. But he also cited tariffs and intellectual property rights as two sticking issues.
Trump last year slapped tariffs on about $250 billion of Chinese imported goods, and Beijing retaliated with penalties on about $110 billion of American products.
Chinese officials have pressed for the removal of all or a substantial portion of the tariffs as part of a trade deal in which China would make big purchases of U.S. goods and address long-standing concerns about China’s market access for foreign firms, intellectual property theft and forced technology transfer policies.
The Trump administration has sought to maintain at least some tariffs on Chinese goods as leverage. There also have been discussions about allowing a snapback of U.S. penalties should China fail to live up to its promises, with Beijing promising to not retaliate.
Analysts doubt China will agree to something that ties its hands. At the same time, U.S. officials know that once tariffs on Chinese imports are removed, it will be harder for Washington to reassess penalties later, especially with the U.S. campaign for the 2020 election. Trump will find it difficult to do something that would hurt farmers and other constituents who would feel the pain from a renewed trade fight with China.
“Both sides are going to have to address tariffs as part of the endgame,” said Myron Brilliant, executive vice president and head of international affairs at the U.S. Chamber of Commerce.
Trump has twice backed off a threat to increase tariffs on Chinese goods, and also spoke about the possibility of meeting last month with Xi at his Mar-a-Lago retreat in Florida.
The president has repeatedly said that the trade deal would be comprehensive and unprecedented. He said Thursday, “This is the granddaddy of them all. We’ll see if it happens.”
But it remains to be seen how strong of a monitoring and enforcement mechanism the U.S. side will come away with. While China will almost certainly promise to buy hundreds of billions of dollars of American farm goods and energy products, among other things, it’s unclear over what period those purchases will be made and how much capacity American companies have to meet the additional demand.
“The proof of the pudding is how it’s going to be implemented,” Brilliant said.
Trump insisted that there will be strong enforcement. “I think we’ll get that done,” he said.
Apart from the substance of any possible deal, the Chinese and U.S. sides also appear to be at odds on the specifics of a summit between Trump and Xi.
Trump previously said he would like to have Xi return to Mar-a-Lago to put the finishing touches on a trade deal, but the Chinese do not like those optics.
Xi already has been to Mar-a-Lago, and the Chinese do not want to give the impression that Xi was in some way being summoned by Trump, said David Loevinger, a managing director at TCW Emerging Markets Group in Los Angeles and a former senior Treasury Department official for China affairs.
Brilliant, the Chamber of Commerce executive, said the Chinese would prefer a meeting at a neutral site. That could point to a Trump-Xi summit in June when the two leaders are expected to attend the Group of 20 economic summit in Japan.
Last winter Trump and Xi met for dinner on the sidelines of the G-20 meeting in Buenos Aires, where they announced a truce in their tit-for-tat trade war.
If the two sides can reach agreement, it would mark a breakthrough after more than a year of escalating tensions. It could help lift a big cloud of uncertainty in the global economy and also provide some ballast to bilateral relations that have become increasingly fraught over Beijing’s broader geopolitical and economic activities.