Trump Xi meeting unlikely before a crucial March deadline.
US President Donald Trump said on Thursday that it was “unlikely” he would meet with his Chinese counterpart Xi Jinping before a crucial March deadline, a significant change in the prospects for ending a trade war that has roiled the global economy.
A meeting between the two leaders, which was announced last week after two days of trade talks in Washington, was originally expected to take place at the end of this month, close to Trump’s second summit meeting with North Korean leader Kim Jong-un in Vietnam.
Speaking to reporters at the White House on Thursday, Trump confirmed that no meetings between him and Xi were planned before the March 1 deadline for a deal. In the absence of an agreement, additional US tariffs on Chinese imports are scheduled to be imposed on March 2.
Trump responded “No” and shook his head when asked if he would meet with Xi this month. Then he added, “Unlikely.”
The news follows White House economic adviser Larry Kudlow’s less-than-upbeat comments to Fox Business earlier Thursday that there is a “pretty sizable distance” between the world’s two largest economies to reach a deal.
The remarks were the first drastic shift in tone since Washington and Beijing stepped up negotiations last week, hoping to agree to a framework for a deal by the deadline. The countries had taken a 90-day hiatus in their trade war, putting a planned increase in tariffs on hold, to hammer out an accord. Without one, the US will increase the tariffs on US$200 billion of Chinese goods to 25 per cent from the current 10 per cent.
Last week, at the end of the two days of talks, Trump said in a tweet: “No final deal will be made until my friend President Xi, and I, meet in the near future to discuss and agree on some of the long standing and more difficult points.”
US stock markets staged their first major pull-back since the news broke early January that negotiations would resume in Washington. The Dow Jones Industrial Average dropped 200 points, or 0.87 per cent, on Thursday, while S&P 500 and the Nasdaq each lost about 1 per cent.
Trump and Xi may still meet shortly after March 1, but there is still work to do to flesh out a trade deal and prepare the US president for a high-stakes meeting with Kim, scheduled for February 27 and 28.
In his State of the Union address on Tuesday, Trump said a trade deal needed to include “real structural change to end unfair trade practices, reduce our trade deficit and protect American jobs.”
After China’s lead negotiator, Vice-Premier Liu He, surprised Trump last week with a commitment to buy 5 million metric tonnes of American soybeans, a product at the centre of the tariff dispute, Congress stressed that the US should not back away from its demands for key structural changes in exchange for China buying more American goods.
On Thursday, while acknowledging that Trump was still optimistic about a deal, Kudlow said, “We’ve got a pretty sizable distance to go here.” Treasury Secretary Steven Mnuchin said Wednesday that he and Trade Representative Robert Lighthizer were going to China for another round of talks next week.
The US stock selloff exacerbated a global market pullback Thursday on worries about a worldwide economic slowdown. The European Commission cut its growth outlook for the euro zone this year citing concerns over global trade tensions and domestic challenges.