President Donald Trump has said in recent days the US could soon defuse trade tensions with China, though administration officials emphasized that further negotiations would be needed to resolve key economic issues between the two sides.
Speaking to reporters on the White House lawn Friday evening, Trump said he and President Xi Jinping could sign a so-called phase one agreement as soon as this month. He added that meeting could take place in Iowa, a state Trump won in 2016 but that has suffered financial losses from retaliatory tariffs levied by the second-largest economy.
“China wants to make the deal very much,” the president said. “I don’t like to talk about deals until they happen, but we’re making a lot of progress.”
But China hawks in the Trump orbit have expressed a less optimistic tone toward negotiations, suggesting that the first stage of the agreement would not be comprehensive. In an interview with Fox Business Network on Friday, White House trade adviser Peter Navarro said the agreement would need two more phases to address the “structural deadly sins of China.”
The US halted planned tariff increases in mid-October, saying China had agreed to a series of trade and economic stipulations at the center of a Section 301 investigation that ignited the dispute in early 2018. Trump said those included unspecified commitments on technology rules, currency practices and market access for financial services companies.
Businesses and analysts have remained cautious, however, particularly after China dodged confirmations of announced farm purchases. Just as the two sides were seen on the verge of a breakthrough in May, negotiations fell apart as the US said China had reneged on nearly all issues in a draft agreement.
“A shortfall in agricultural purchase commitments might well lead to a reescalation in the conflict further down the road,” said Mark Haefele, the chief investment officer at UBS. “Longer-term trade issues on intellectual property and market access are likely to remain unresolved.”