American and Chinese negotiators have revived trade talks in the hopes of reaching a draft agreement before President Donald Trump and Chinese leader Xi Jinping meet face-to-face on the sidelines of the G20 meeting in Argentina.
Chinese negotiators will arrive in Washington “shortly” with the aim of ironing out an informal deal, Commerce Secretary Wilbur Ross said Tuesdayat a panel event in Washington, though he did not specify an exact time frame for a meeting.
Trade will be one of the issues up for discussion when the delegation arrives, a Treasury spokesperson told CNN.
The fresh momentum comes after months of widening stalemate between the world’s two largest economies over trade, a key issue for Trump.
White House economic adviser Larry Kudlow said later Tuesday morningon CNBC that the restart of talks is “a good thing.”
Trump was scheduled to meet with members of his trade team on Tuesday to discuss a separate issue: auto tariffs. The US government is weighing whether to impose tariffs on Japanese and European SUVs, vans and auto parts, ostensibly to protect national security interests. It’s unlikely a decision is imminent, according to a US official.
That issue is separate from the Chinese tariff talks.
Treasury Secretary Steven Mnuchin and Chinese Vice Premier Liu He spoke by phone on Friday, a spokesperson for the agency confirmed Tuesday, an effort to restart trade discussions ahead of the two leaders meeting, which Trump has boasted would be a “good meeting.” The call was first reported by the Wall Street Journal.
So far, Chinese government officials have declined to comment directly on the reported call between Mnuchin and Liu, but have acknowledged recent communications following a phone conversation earlier this month between Trump and Xi.
“The two countries’ economic teams are in touch to implement the consensus reached by the two leaders,” Chinese Assistant Commerce Minister Li Chenggang said at a news briefing in Beijing on Tuesday. “We hope to achieve positive results with efforts from both sides.”
Ross was slightly more equivocal Tuesday in his comments at the Yahoo! Finance’s America Financial Future summit. When asked if the two sides were in the final innings of their negotiations, Ross replied, “We are where we are.”
He also addressed rumors that the President is considering replacing him with the head of the Small Business Administration Linda McMahon. “I’ll serve as long as the President wants, and I have no indication to the contrary,” he said.
The United States is demanding that China come up with a clear offer before negotiations on a trade deal can start, but Beijing wants to talk first and then make a firm proposal later, according to the WSJ’s report, citing people familiar with discussions.
Both sides have been working toward a path to end the trade war, which has left investors jittery over the lasting effects on American consumers and corporations.
President and CEO of the Business Roundtable Joshua Bolten speaking at the same Yahoo summit said the Trump administration had made “mistakes” in its strategy with China by slapping rounds of tariffs as the opening gambit.
“It would have been much more productive to hold those threats [of tariffs] and sit down and try to have some constructive negotiations with the Chinese,” said Bolten, who previously served as President George W. Bush’s chief of staff and budget director. “This is not a country that’s going to be easily bullied.”
Top Trump administration officials have sent conflicting signals in recent weeks.
Mnuchin on the sidelines of the International Monetary Fund meeting in Bali, Indonesia, last month dismissed the idea the US had set any pre-conditions for the leaders’ meeting, leaving the decision in the hands of the President. “To the extent we can make progress toward a meeting, I would encourage that and that is something we are having discussions about,” he said.
Shortly thereafter, Kudlow warned of the differences between the two sides when he said last month, “China has not responded positively to any of our asks.”
The Trump administration has been divided between free traders — including those with Wall Street backgrounds like Mnuchin and Kudlow — and hardliners like US Trade Representative Robert Lighthizer and White House trade adviser Peter Navarro.
Just last week Navarro took a shot at Wall Street, warning “globalist elites” against meddling with the Trump administration’s policy on China. “If and when there is a deal, it will be on President Donald J. Trump’s terms – not Wall Street terms,” Navarro said during a speech at the Center for Strategic and International Studies in Washington.
Speaking to reporters on the White House lawn Tuesday, Kudlow said Navarro, a former economics professor, “misspoke” and “wasn’t authorized” to speak on the matter.
In New York, former Treasury Secretary Hank Paulson offered a dim view on rising tensions between the two countries, calling on China to “do no harm” and the US to “dial down the rhetoric” in a sweeping speech at the Asia Society.
“The US-China strategic interaction is by far the most consequential in the world,” said Paulson. “I am very sobered by the trajectory we are on.”
He called on US leaders to work with like-minded partners to reach a multi-party investment agreement with China by jointly withholding access to the US, European Union and Japanese markets, to test Beijing’s willingness to open up its markets.
The United States has imposed tariffs on Chinese products ranging from food seasonings and baseball gloves to network routers and industrial machinery parts. China’s retaliatory tariffs have hit thousands of US exports including meat, alcoholic drinks, chemicals, clothes, machinery, furniture and auto parts.
And doubts remain over whether the two economic superpowers can reach a deal anytime soon.
“The issue with China is not just tariffs,” said Ross at the Yahoo! panel. “If it was just tariffs, I think we could work it out very, very, very quickly.”
“The real issue is intellectual property rights, forced technology transfers, industrial espionage, that kind of thing. We can’t tolerate abuses of that sort,” he said.
The Trump administration has already slapped tariffs on $250 billion in Chinese products since July. The tariffs on $200 billion of those goods are set to increase to 25% from 10% on January 1, which would further escalate the conflict.
China has so far retaliated with tariffs on $110 billion of US products and is likely to respond with more if the United States goes ahead with the increase at the start of January.
Trump has made it a priority to take an aggressive stance against China for what he says are unfair trade practices, including intellectual property theft and forced technology transfers. He’s threatened to escalate the trade war further by imposing tariffs on all the remaining goods that China sells to the United States.
Many American manufacturers, farmers and lawmakers from both sides of the aisle say they appreciate the administration’s efforts to change China’s trade policies. But some argue the tariffs aren’t the best way to address the problems. They pose a dilemma for US importers who must decide whether to absorb the higher cost of the goods or pass it on to consumers, and some exporters are hurting from China’s retaliatory tariffs.
CNN’s Steven Jiang, Kevin Liptak, Allie Malloy and Katherine Lobosco contributed to this report.
