No talks between Trump, Xi before trade deadline

US trade representative Robert Lighthizer and US treasury Secretary Steven Mnuchin are leaving today for the next round of talks in China.
Jo-Mare Duddy Booysen
Jeff Mason and Steve Holland - US president Donald Trump said on Thursday he did not plan to meet with Chinese president Xi Jinping before a March 1 deadline set by the two countries to achieve a trade deal.

Asked during an event in the Oval Office whether there would be a meeting before the deadline, Trump said: "No."

When asked whether there would be a meeting in the next month or so, Trump said: "Not yet. Maybe. Probably too soon. Probably too soon."

The remarks confirmed comments from administration officials who said the two men were unlikely to meet before the deadline, dampening hopes of a quick trade pact and sparking a drop in US stock markets.

Late last year during a dinner between Trump and Xi in Argentina, the two men agreed to take a 90-day hiatus in their trade war to give their teams time to negotiate an agreement.

If the talks do not succeed, Trump has threatened to increase US tariffs on Chinese imports. Another round of talks is scheduled for this week in Beijing.

Trump, who is proud of having a warm relationship with Xi, said recently he would meet with him again to hammer out a final deal, after Chinese vice premier Liu He presented Xi's invitation at the White House.

A person briefed on the talks said that Trump's advisors were concerned that accepting a meeting invitation at this stage would raise unfounded expectations for a quick deal and erode US leverage in the talks, where the two sides remain far apart on core structural intellectual property issues.

"There was concern about the downside for markets in particular if they don't reach a deal," the source said.

Asia

The president is scheduled to travel to Asia at the end of this month for a summit with North Korean leader Kim Jong Un in Vietnam, and some had speculated that he could meet with Xi on the same trip. Trump had indicated that was one option, or Xi could come to the United States.

White House economic advisor Larry Kudlow told reporters that the leaders of the two economic superpowers could still meet at a later date.

"At some point the two presidents will meet, that is what Mr. Trump has been saying. But that is off in the distance still at the moment," he said.

The news prompted a sharp selloff in US stocks, dashing the optimism that had been building that the countries were progressing toward a deal before tariffs on Chinese imports rise to 25% after the March 1 deadline.

"I could see where that would impact the markets because obviously we had a lift in the month of January from optimism surrounding these trade talks," said Peter Jankovskis, co-chief investment officer at OakBrook Investments LLC in Lisle, Illinois.

Next round

US trade representative Robert Lighthizer and US treasury Secretary Steven Mnuchin are leaving today for the next round of talks in China, one administration official said. "They're hoping for more success," he said.

The United States is pressing China to make major reforms, including on structural issues related to how it treats US companies doing business there. Washington accuses China of stealing US intellectual property and forcing American businesses to share their technology with Chinese companies. China denies the accusations.

Trump said in his State of the Union address on Tuesday that any new trade deal with Beijing "must include real, structural change to end unfair trade practices".

Such reforms have been a sticking point in talks so far.

Headway

Lighthizer told reporters recently that the two leaders may not meet if the negotiations do not progress sufficiently.

"If we do make headway, and the president thinks we're close enough that he can close the deal on major issues, then I think he'll want to have a meeting and do that," he told reporters. "I have complete confidence in the president, both to close a deal if we get to that point, but also to make that judgment."

Trump has vowed to increase US tariffs on US$200 billion worth of Chinese imports to 25% from 10% currently if the two sides cannot reach a deal by 12:01 a.m. (0501 GMT) on March 2.

CNBC reported that the tariffs were likely to remain at the 10% rate. Three sources familiar with the matter indicated that report was wrong. The president has said repeatedly that the tariffs would go up if no deal has been reached, and that position has not changed, one source said.

Lighthizer said recently that tariffs had not been a subject of the talks. – Nampa/Reuters

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