Stocks finish sharply higher on optimism over a U.S.-China trade resolution.
President Donald Trump said Tuesday that he would consider delaying a March 2 deadline to reach a trade deal with China, saying the United States might not impose higher tariffs on Chinese goods if talks with Beijing go well.
“If we’re close to a deal where we think we can make a real deal, I could see myself letting them slide for a little while,” Trump said during remarks at the Oval Office.
Trump’s comments came as U.S. officials were in Beijing for a week of talks with Chinese officials to try to resolve a trade war that has begun to inflict economic damage on both sides of the Pacific. The two countries are trying to work out significant differences before the March 2 deadline, when the United States has said it will increase tariffs on $200 billion worth of Chinese goods to 25 percent from 10 percent.
Both Trump and his top trade negotiator, Robert Lighthizer, have said that the deadline is a firm date and that the United States will not extend the timeline, which Trump and President Xi Jinping of China agreed upon during a dinner in Buenos Aires, Argentina, last year.
But with many of the biggest issues unresolved and the deadline drawing near, Trump appeared ready to give both sides more time to negotiate. And he once again suggested that he and Xi may ultimately need to iron out the remaining differences before a final deal is reached.
“At some point, I expect to meet with Xi and make the parts of the deal that the group is unable to make,” Trump said.
The president originally suggested that such a meeting could take place before the deadline but reversed course last week, saying he would not meet with Xi before March 2.
A delegation of top U.S. trade officials, including Lighthizer and Treasury Secretary Steven Mnuchin, arrived in Beijing this week to try to negotiate the outlines of a deal.
Trump characterized those discussions as “going well” and said he thought the United States had a chance “to make a real deal.”
He added that he wanted it “to be a real deal, not just a deal that looks cosmetically good for a year.”
But steep challenges remain to striking an agreement that addresses the administration’s primary concerns, including China’s practice of forcing U.S. companies to hand over valuable technology and restricting access to its market. Lighthizer, who briefed senators last week, told lawmakers that one of the biggest issues was ensuring that China followed through with whatever commitments it makes. Senators told Lighthizer that they wanted the text of any agreement or memo of understanding with China to be made public.
For now, China primarily appears willing to buy more U.S. goods, like soybeans, but has not indicated how many other concessions it is prepared to make. And while both countries have expressed optimism about bridging the differences, Xi is facing pressure in China not to agree to a deal that would jeopardize his country’s economic or national security. China’s economy is growing at its slowest pace in years, in part because of the U.S. tariffs.
Trump on Tuesday again portrayed China’s economic weakness as the United States’ strength, saying it was in China’s interest to make a deal. The United States, he said, could benefit by retaining tariffs on $250 billion worth of Chinese goods, and once again he inaccurately suggested that China was paying the levies.
“I’m happy either way,” he said. “I could live receiving billions and billions of dollars a month from China. China never gave us 10 cents. Now they are paying billions a month for the privilege of coming into the U.S. and honestly taking advantage.”
While the United States is collecting billions in tariffs, that money is not coming directly from China but from companies and customers who buy imported goods.