Donald Trump, the US president, has said it would take a new summit with Xi Jinping, his Chinese counterpart, to reach a deal to end the trade war between the countries, as a high-level negotiating session in Washington looked set to end without any big breakthroughs.
“No final deal will be made until my friend President Xi, and I, meet in the near future to discuss and agree on some of the longstanding and more difficult points,” Mr Trump said in a tweet on Thursday. “China’s representatives and I are trying to do a complete deal, leaving NOTHING unresolved on the table.”
Mr Trump’s tweet came on the second and final day of a crucial round of talks led by Liu He, China’s vice-premier, and Robert Lighthizer, the US trade representative, at the White House.
The two sides are facing a tight self-imposed deadline of March 2 to reach an agreement, or US tariffs on $200bn of Chinese imports will rise from 10 per cent to 25 per cent. That could potentially destabilise financial markets on both sides of the Pacific and deal a blow to the global economy.
The US has been putting pressure on Beijing to make big concessions on its economic model and to rein in industrial subsidies, the role of state-owned enterprises and the forced transfer of technology from US companies operating in China. But it has struggled to extract any shift from Mr Xi’s top officials.
Although China has offered to boost its purchases of US goods to reduce the bilateral trade deficit — and suggested it was willing to discuss regulatory changes to improve market access for international investors — it has been reluctant to undermine its state-driven economic model.
However, US officials are counting that fears of a tariff escalation in Beijing will be more intense than they are in Washington over the next month. “China does not want an increase in Tariffs and feels they will do much better if they make a deal,” Mr Trump said.
The White House is facing pressure of its own, given the hit to the economy delivered this month by the partial government shutdown and Mr Trump’s sensitivity to movements in equity markets. Politically, Mr Trump will be weighing the need for a political victory that would be sealed with the fulfilment of his frequent pledges to reset trade relations with Beijing against the likelihood that Democrats will attack any agreement seen as too weak or inconclusive.
The chances of a big breakthrough this week in the trade talks were relatively low, given the lack of a new Chinese proposal on structural issues, and the criminal indictment on Monday of Huawei, the Chinese technology company, on charges that it stole US technology and violated US sanctions.
The indictment was met with outrage in Beijing, and Huawei denied the allegations. Huawei chief financial officer Meng Wanzhou is detained in Canada pending a US extradition order related to the charges, which she has denied, in a case that has exacerbated tensions between the countries.
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