U.S. President Donald Trump is reportedly considering a 60-day extension to the current deadline before slapping China with more tariffs so negotiations can continue with the two sides still far apart. According to Bloomberg sources, much of the remaining deal-making will come down to what Presidents Trump and Xi Jinping of China can conjure up when the two meet one-on-one.
U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steve Mnuchin met with their Chinese counterparts on Thursday for the first of two high-level talks aimed to end the trade war between the world’s two largest economies. The longer the two sides go without a new trade deal in place, the more damaging it is for economies and markets around the globe.
The sides have reportedly failed to come to an agreement, mostly centered around structural reforms to China’s economy requested by the U.S.
The tariff increases are set to be enacted on March 1 unless Trump grants an extension while the two sides try to hammer out an agreement.
The U.S. is refusing to give up on demands that China dial back its government subsidies for state-owned businesses, and improve corporate governance in what is reportedly a non-starter for the Chinese.
The hurdles raise questions about whether negotiators can meet Trump’s criteria for pushing back the March 1 deadline for more than doubling tariffs on $200 billion of Chinese goods. On Tuesday he said he was open to doing so if the two countries were close to a deal that addresses deep structural changes to China’s economic and trade policies.
Xi-Trump Summit
The lack of progress so far signaled to China that it would take a meeting between Trump and Xi to get a deal done, the people said.
White House adviser Kellyanne Conway said on Tuesday that Trump wants to meet Xi “very soon.”
A meeting date between Trump and Xi has not been set and it is unlikely the pair can meet before the March 1 deadline. Trump is considering pushing back the deadline for imposition of higher tariffs on Chinese imports by 60 days, Bloomberg News reported late Wednesday.
When asked if the administration was considering delaying the deadline, White House economic adviser Larry Kudlow said no decision has been made. Xi is due to meet with Mnuchin and Lighthizer on Friday, he said.
Negotiators in Beijing “are soldiering on” and the “vibe” is good, Kudlow said on Fox News, adding that he was briefed by U.S. officials earlier Thursday. “They are going to be meeting with President Xi tomorrow, which is a very good sign. They are moving through all of the issues. They are getting the job done.”
Kudlow later told reporters at the White House that he’s “cautiously optimistic” on the outcome of the talks with China.