U.S. President Donald Trump and Chinese President Xi Jinping, who spoke by telephone on Thursday, expressed optimism about resolving their trade dispute ahead of a high-stakes meeting at the end of November in Argentina.
But within hours of upbeat assessment, the U.S. Justice Department took aim at another Chinese firm it accused of unfair practices, part of an across-the-board pressure campaign by the Trump administration targeting China.
Still, investors cheered the resumption of dialogue and a report that Trump was taking steps to resolve the tariff war, with shares in Asia hitting three-week highs on Friday and the dollar softening.
Trump said on Twitter that trade discussions with China were “moving along nicely,” and that he planned to meet Xi on the sidelines of a G20 summit, in Argentina, after the two had a “very good” phone discussion.
Bloomberg, citing people familiar with the matter, later reported that Trump wants to reach a trade agreement with China at the G20 meeting and that after the call with Xi, he had asked officials to begin drafting possible terms.
The news agency said it was not clear if Trump was easing up on demands that China has resisted, and it cited one person as saying intellectual property theft was a sticking point on a possible deal.
In comments in state media, Xi said he hoped China and the United States would be able to promote a steady and healthy relationship, and that he was willing to meet Trump in Argentina.
“The two countries’ trade teams should strengthen contact and conduct consultations on issues of concern to both sides, and promote a plan that both can accept to reach a consensus on the China-U.S. trade issue,” Xi said on CCTV state television.
Xi was quoted as saying after the call with Trump that they had hoped to expand trade cooperation.
Neither leader specified any details of possible progress in their first known direct discussion in several months.
Trump administration officials have said that trade talks with China cannot resume until it comes up with specific actions it is willing take to meet U.S. demands for sweeping changes to policies on technology transfers, industrial subsidies and market access.
The two countries have imposed tariffs on hundreds of billions of dollars of each other’s goods and Trump has threatened to put tariffs on the remainder of China’s $500 billion-plus exports to the United States if the disputes cannot be resolved.
Jacob Parker, vice president of China operations at the U.S.-China Business Council in Beijing, said there were plenty of challenges that would require significant negotiations in advance of a meeting between Trump and Xi to ensure success.
“What negotiations have lacked to date has been that (presidential) level of engagement. If President Trump makes an agreement with President Xi, there is nobody above them to overturn it,” he said.
“We’re optimistic this is a potential off-ramp of increasingly antagonistic trade tensions and hope it leads to a pause and new negotiations,” he said.
Tu Xinquan, a trade expert at Beijing’s University of International Business and Economics, said he was sceptical that the Trump administration was truly ready to deal, and that other factors, such as the mid-term congressional elections, could be driving statements from the administration.
“The best situation (from a Trump-Xi meeting) would be no further actions, temporarily. But the tariffs already imposed will not go away,” Tu said.