China makes Mar-a-Lago summit a priority as US trade war talks continue

Even as Chinese and American negotiators continue to haggle over thorny trade issues in Washington, Beijing has told its officials to make preparations for a Mar-a-Lago summit between Donald Trump and Xi Jinping their top priority.

Beijing has accepted Washington’s choice of the US president’s private resort in Florida as the venue and preliminary preparations are under way although many details, including the exact date, are still under discussion, a source said.

An earlier proposal by China to hold the summit in its southern island province of Hainan was rejected by the US.

Top trade negotiators from both sides wrapped up their talks on Monday, with Trump announcing a postponement to further tariff increases on Chinese imports.

Several Chinese negotiators stay in Washington to continue talks on thorny trade issues

China’s lead negotiator Liu He has returned to Beijing, leaving some members of the Chinese delegation behind to work with the US negotiating team to clear any remaining blocks to the summit and prepare something for the two leaders to sign.

Three people with knowledge of the talks said the remaining delegates would be in Washington for a few more days to try and iron out a framework for a deal to resolve the stickier issues.

Sources said many problems remained and that both sides still saw big gaps in structural issues such as technology transfers and enforcement mechanisms.

They said the two sides had different views on how the structural issues should be prioritised, with one source adding there was debate inside the Chinese government on how far the reforms could go.

The US wants China to eliminate its requirement for US firms to set up joint ventures to gain access to Chinese markets, the source said. Beijing has never admitted the existence of forced technology transfers.

There has been progress on some matters, apart from China’s commitment to purchase more American products. The source said negotiators had made an important structural adjustment to reduce agricultural import barriers to China.

If the summit proceeds as planned, it will be Xi’s second meeting with Trump at Mar-a-Lago, where the US president hosted a high profile reception for his Chinese counterpart in 2017.

Chinese Foreign Ministry spokesman Lu Kang did not give any details of the arrangements for Xi’s trip at the regular daily briefing on Tuesday, but did say officials from the two nations were still discussing a final deal, and China was keen for the two presidents to meet.

“President Xi has also made clear in his message to President Trump that he looks forward to another meeting with him,” Lu said, referring to a letter from Xi to Trump which was delivered last week by Liu.

“I believe that the working teams of the two sides will be fully prepared for the relevant leaders’ meeting,” Lu said.

At their last meeting, Trump said there had been “tremendous progress” in the “outstanding” relations between China and the US – in sharp contrast to his remarks during the 2016 election campaign when he said China had “raped the US” and vowed to name the country as a currency manipulator.

Xi travelled to Mar-a-Lago in 2017 via a state visit to Finland, to avoid being seen as making any concessions to the US by making it the only destination for his trip.

While the lower-level discussions continue in Washington between the two teams of negotiators, a commentary by state-run newspaper People’s Daily on Tuesday said the key talks had sent a positive signal that the trade dispute between the two nations could be resolved.

It said China and the US would continue pushing for healthy development of their economic and trade relations, making it a contributing factor to global economic growth.

Aninda Mitra, senior sovereign analyst with BNY Mellon Investment Management, said in a research note that China-US trade relations were not about to revert to their previous state, but things would not get worse.

“Notwithstanding the relief in Chinese markets and an expected improvement in global risk sentiment, the bilateral trade relationship will remain complicated. For starters, any trade deal will still cause heartburn among hardliners in the US and attract the Democrats’ criticism. Enforcement mechanisms will also come with tough retaliation options which will likely be aggressively used by the US Trade Representative’s office,” Mitra said in a research note.

Additional reporting by Teddy Ng