Pos­si­ble Trump-Xi talks raise hope

Po­ten­tial meet­ing could help thaw trade stale­mate

Daily Southtown (Sunday) - - Business - By Christo­pher Bodeen and Mar­tin Crutsinger

BEI­JING — With China and the United States open­ing the door to a meet­ing next month be­tween Pres­i­dents Xi Jin­ping and Don­ald Trump, hopes are ris­ing for a po­ten­tial eas­ing of ten­sions in the trade war be­tween the world's two largest economies.

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, andwe 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.

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 U.S. have at least tem­po­rar­ily de­fied fore­casts they would weaken af­ter be­ing hit by puni­tive U.S. tar­iffs of up to 25 per­cent.


Pres­i­dent Don­ald Trump, right, chats with Chi­nese Pres­i­dent Xi Jin­ping last Novem­ber in Bei­jing.

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