The U.S. and China have made little progress so far during trade talks in Beijing, leaving much work to be done before President Donald Trump and his counterpart Xi Jinping look to seal a deal at a yet-to-be scheduled summit, according to people familiar with discussions.
In closed-door sessions, the sides have failed to narrow the gap around structural reforms to China’s economy that the U.S. has requested, even as both seek to avoid an increase in tariffs after March 1, according to three U.S. and Chinese officials who asked not to be identified because the talks were private.
U.S. stocks declined on news of scant progress, with the S&P 500 Index down 0.3% at 10:47 a.m. in New York.
On Thursday, U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin met with counterparts including Chinese Vice Premier Liu He for the first of two days of high-level talks.
The U.S. has not relented on demands for China to dial back government subsidies for state-owned enterprises and improve corporate governance, one of the people said, an extremely sensitive issue that is seen as a non-starter for Chinese leaders.
The hurdles raise questions about whether negotiators can meet Trump’s criteria for pushing back the March 1 deadline for more than doubling tariffs on $200 billion of Chinese goods. On Tuesday he said he was open to doing so if the two countries were close to a deal that addresses deep structural changes to China’s economic and trade policies.
The lack of progress so far signaled to China that it would take a meeting between Trump and Xi to get a deal done, the people said.
White House adviser Kellyanne Conway said on Tuesday that Trump wants to meet Xi “very soon.”
A meeting date between Trump and Xi has not been set and it is unlikely the pair can meet before the March 1 deadline. Trump is considering pushing back the deadline for imposition of higher tariffs on Chinese imports by 60 days, Bloomberg News reported late Wednesday.
When asked if the administration was considering delaying the deadline, White House economic adviser Larry Kudlow said no decision has been made. Xi is due to meet with Mnuchin and Lighthizer on Friday, he said.
Negotiators in Beijing “are soldiering on” and the “vibe” is good, Kudlow said on Fox News, adding that he was briefed by U.S. officials earlier Thursday. “They are going to be meeting with President Xi tomorrow, which is a very good sign. They are moving through all of the issues. They are getting the job done.”
Kudlow later told reporters at the White House that he’s “cautiously optimistic” on the outcome of the talks with China.