Prospect of Trump-Xi talks raises hope
Potential meeting could help thaw trade stalemate
Worries about the increased tariffs the two sides have imposed on each other’s goods have contributed to this week’s dizzying volatility in financial markets. The higher tariffs have elevated costs for companies in both countries, and economists say that if they remain in place indefinitely, they could depress economic growth.
A Xi-Trump meeting — if it happens — would take place during a summit of leaders of the Group of 20 biggest global economies in Argentina in late November.
In Bali, Indonesia, where he’s attending global finance meetings, Treasury Secretary Steven Mnuchin said, “We are having discussions about a potential meeting.”
Later Friday, Larry Kudlow, Trump’s top economic adviser, said in Washington that preparations for the talks were underway.
“It looks like there will be a meeting in Buenos Aires at the G-20,” Kudlow said in an interview with CNBC. “We are looking at it. The Chinese are looking at it. Preparations are being made. I can’t say 100 percent certainty, but there is no question everybody is looking at it.”
Kudlow said that so far, the administration viewed China’s negotiating offers as “rather unsatisfactory” but that “maybe talks between the two heads of state will bear fruit.”
The trade feud has been fueled by U.S. accusations that China engages in cyber-theft and coerces foreign companies into handing over technology in return for access to the Chinese market, as well as by Trump’s anger over China’s trade surplus with the U.S.
It is far from clear that the U.S. might be preparing to consider lifting penalty tariffs on about $250 billion of Chinese products.
Mnuchin suggested that the two leaders could meet next month if the Trump administration felt trade discussions were moving in a positive direction.
“We need to do work in advance to be sure there are changes, and we can have a more balanced trading relationship,” the Treasury secretary said. “And that we’re going to be make sure we don’t have forced joint transfers and forced transfer of technology.”
Lu Kang, a spokesman for China’s Foreign Ministry, offered no specifics Friday but said, “I have also seen the relevant reports.”
The Wall Street Journal and the Washington Post have cited officials as saying Trump has decided to proceed with a meeting with Xi.
Reports that Mnuchin has advised against labeling China a currency manipulator — a status that could trigger penalties — were also seen as easing tensions.
The Chinese currency has been falling in value against the dollar in recent months, raising concerns that Beijing is devaluing its currency to make Chinese goods more competitive against U.S. products.
In his comments in Bali, Mnuchin did not say what the forthcoming Treasury report, set to come out next week, will conclude about China’s currency practices. In the past, Treasury has placed China on a watch-list but found that Beijing did not meet the threshold to be labeled a currency manipulator.
China’s surplus with the United States widened to a record $34.1 billion in September as exports to the American market rose 13 percent from a year earlier to $46.7 billion, down slightly from August’s 13.4 percent growth.
Imports of American goods increased 9 percent to $12.6 billion, down from August’s 11.1 percent growth.
Beijing’s exports to the United States have at least temporarily defied forecasts they would weaken after being hit by punitive U.S. tariffs of up to 25 percent.