China and the United States are restarting trade talks ahead of a meeting next week between Presidents Donald Trump and Xi Jinping, cheering financial markets with hope that a boosting trade war between the two countries would abate.
Trump said on Tuesday that teams from the 2 sides would begin preparations for the leaders to sit down at the G20 summit in Osaka. China, which previously rejected to say whether the two leaders would meet, affirmed the get-together.
“Had a very good telephone conversation with President Xi of China. We will be having an extended meeting next week at the G-20 in Japan. Our respective teams will begin talks prior to our meeting,” Trump said in a post on Twitter.
Talks to reach a broad deal broke down last month after US officials accused China of backing off from previously agreed commitments. Interaction between the two sides since then has been limited, and Trump has endangered, repeatedly, to slap more tariffs on Chinese products in an escalation that businesses in both countries wish to avoid.
White House officials declined to go into detail about the preparations or expected results from the talks in Japan, but each side reiterated long-held positions: US officials called for structural changes in the Chinese economy and in how Beijing treats US businesses; China involved in dialogue instead of luxurious tariffs.
“The key is to show consideration to each other’s legitimate concerns,” Xi said, according to Chinese state media. We also hope that the United States treats Chinese companies fairly . “I agree that the economic and trade teams of the two countries will maintain communication on how to resolve differences.”
Washington has already imposed 25 percent tariffs on $250 billion of Chinese goods, starting from semi-conductors to furniture, that is brought in to the United States.
Trump has risked putting tariffs on another $325 billion of goods, overlaying nearly all of the remaining Chinese imports into the United States, like products such as cellphones, computers and clothing.
Trump had built no secret that, in spite of his threat to escalate the dispute, he desired to meet with Xi while they are both in Japan. China’s confirmation of the meeting avoids the possibility of a snub to Washington that could have triggered another round of tariffs.
Trump praised his relationship with Xi and spoke optimistically about finding a deal. “I think we have a chance. I know that China wants to make a deal. They don’t like the tariffs, and a lot of companies are leaving China in order to avoid the tariffs,” he told reporters at the White House.
“I think the meeting might very well go well, and frankly our people are starting to deal as of tomorrow. The teams are starting to deal. So we’ll see. China would like to make a deal. We’d like to make a deal, but it has to be a good deal for everybody.”
Trump’s tweet provided fresh fuel to a rally on Wall Street as investors bet renewed talks could diffuse the trade war between the two economic giants. The S&P 500 gained nearly 1%, while the Nasdaq and Dow Jones Industrial Average both gained around 1 .4%. All closed at their highest levels since early May when Trump knocked global stock markets by ratcheting up tariff rates on $200 billion of imported Chinese goods.
“Leader level engagement at last years G20 was critical to jumpstarting the talks. It will be essential to managing the current political dynamic and getting the talks back on track once again, he said.
Based on Chinese state media, Xi told Trump that the China-US relations had encountered difficulties. If China and the United States cooperate, both benefit. If they fight, both get hurt, state media paraphrased Xi as saying.
Beijing needs the United States to lift its tariffs, but US Trade Representative Robert Lighthizer, who has spearheaded negotiations, said on Tuesday that talks alone were insufficient.
“I don’t know if it will get them to stop cheating, tariffs alone. I think you don’t have any other option,” Lighthizer told a congressional hearing. “I know one thing that won’t work and that is talking to them. Because we’ve done that for twenty years,” he said.