Low expectations from Trump-Xi trade talks

WASHINGTON: With less than three weeks to go before proposed talks between the Chinese and US leaders, expectations for progress toward ending the trade war are low and sources say there has been little preparation for a meeting even as the health of the world economy is at stake.

President Donald Trump says he wants to meet with President Xi Jinping at the June 28-29 G20 summit in Osaka, Japan and will decide on whether to extend tariffs to almost all Chinese imports after that.

Though neither side has confirmed that a meeting will take place, investors worldwide who have seen over a trillion dollars wiped from global markets in the past month due to ongoing US-China trade war will be closely watching any interaction between the two men.

Relations have deteriorated since May when negotiations to end the US-Chinese trade disputes broke down, all but killing off the possibility of an agreement in Japan.

“The atmosphere is poisonous,” one senior Beijing-based Western diplomat told Reuters, referring to China-US ties.

Sources familiar with the matter, including officials and diplomats in Washington and Beijing, say there has been a lack of preparatory work for the meeting, due largely to the increasing acrimony. The trade negotiating teams have not met since talks ended in stalemate on May 10.

The White House declined to comment on plans for a Trump-Xi meeting.

“Preparations for the G20 summit in Japan are ongoing. We have nothing to announce at this time regarding specific bilateral meetings,” White House National Security Council spokesman Garrett Marquis commented.

White House Economic Adviser Larry Kudlow told CNBC on Tuesday that Trump is hoping to “pick up where we left off” in the talks with Xi.

Trump said again on Monday that he expected the meeting to happen, and threatened more tariffs on Chinese imports if there is not enough progress or if Xi does not attend.

China is open to more trade talks but has nothing to announce about a possible meeting between the two leaders, Foreign Ministry Spokesman Geng Shuang said on Monday. He said on Tuesday that China would “fight to the end” if Washington escalates trade fictions.

Sources said the two leaders are likely to have some kind of meeting but whatever happens in Osaka, it will be a downgrade from the possibility both sides feted just two months ago — when they hoped the talks would be the scene for the two presidents to sign a historic trade deal.

A senior Chinese official told US business representatives last week that preparations had yet to begin for either a Trump-Xi meeting or to resume trade negotiations, a source with direct knowledge of the briefing said.

On the US side in recent years, the lack of preparation for a big meeting is not that unusual. Trump often attends important talks with little advance work and makes policy on the fly.