Abu Dhabi, UAEWednesday 24 April 2019

Trump to meet Chinese Vice Premier as trade deal inches closer

Drafts of an agreement would give Beijing until 2025 to meet commitments on commodity purchases and allow US firms to wholly own enterprises in China

Donald Trump will meet Chinese vice premier Liu He at the White House on Thursday. Reuters
Donald Trump will meet Chinese vice premier Liu He at the White House on Thursday. Reuters

US President Donald Trump will meet Chinese Vice Premier Liu He at the White House on Thursday as speculation grows that negotiations over a trade deal between the world’s biggest economies is entering the final stages.

Talks are continuing in Washington where Liu held meetings with US Trade Representative Robert Lighthizer and Treasury secretary Steven Mnuchin on Wednesday. The goal over the next few days is to strike an agreement on the core issues so Mr Trump and Chinese leader Xi Jinping can hold a ceremony to sign a deal.

Drafts of an agreement to end a nearly year-long trade war would give Beijing until 2025 to meet commitments on commodity purchases and allow American companies to wholly own enterprises in the Asian nation, according to three sources.

“Both sides do want an agreement but they want to make sure it’s the right deal for their respective domestic audience,” said Tai Hui, Asia-Pacific chief market strategist at JP Morgan Asset Management in Hong Kong.

Stocks in Asia dipped from a six-month high, as investors look for signs of progress from the talks. The offshore yuan held at 6.7169 per dollar

As the talks resumed on Wednesday morning, Mr Trump’s top economic adviser touted progress but cautioned that a final deal to end the trade war remained elusive. Negotiators are “making good headway,” White House economic adviser Larry Kudlow told reporters at an event in Washington. “But we’re not there and we hope this week to get closer,” he said.

US and Chinese officials are still discussing when the two leaders could sit down to sign off on their trade deal. A meeting date between Mr Trump and Mr Xi could be announced as early as Thursday, sources said. After Mr Xi’s team initially floated a formal state visit to Washington as an option, China has pushed back against a meeting on US soil and wants to instead meet in a neutral third country, the sources said.

While White House officials have expressed cautious optimism in recent days about securing a deal in the near future, a US decision to tentatively sell fighter jets to Taiwan may affect the outcome of this week’s talks as well as any Trump-Xi summit, one of the sources said. Given the geopolitical sensitivities of such a sale, that issue would likely be raised only when the two leaders meet and is unlikely to be part of the trade negotiations led by Lighthizer.

Under the proposed agreement, China would commit by 2025 to buy more US commodities, including soybeans and energy products, and allow 100 percent foreign ownership for American companies operating in China as a binding pledge that can trigger retaliation if left unfulfilled, according to the people, who asked not to be identified because the talks are private.

Other non-binding promises China has offered to implement by 2029 wouldn’t be tied to potential US retaliation, they said, without elaborating.

China’s Commerce Ministry didn’t immediately reply to faxed questions. The White House referred questions to the Office of the United States Trade Representative, which didn’t immediately reply to a request for comment.

Updated: April 4, 2019 10:55 AM

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