China, US are possible locations for Trump-Xi trade deal signing

China is open to various options on where to sign a trade deal with the United States, but will avoid giving too many concessions, sources and diplomatic observers said, as efforts continue to find a new venue after last week’s cancellation of the Asia-Pacific Economic Cooperation summit in Chile.

US President Donald Trump had previously suggested that he and his Chinese counterpart Xi Jinping would sign what he called “phase one” of a deal at the Chilean summit. At the White House on Sunday, Trump said that if a trade deal was reached, it would be signed somewhere in the US.

“First of all, I want to get the deal,” he said. “The meeting place, to me, is going to be very easy.”

Also on Sunday, US Commerce Secretary Wilbur Ross, who is not a key member in the US trade negotiations team, told Bloomberg that Iowa, Alaska, Hawaii and even locations in China were all possible.

In talks with Ross and US National Security Adviser Robert O’Brien in Bangkok on Monday, Chinese Premier Li Keqiang said that China and the US must stabilise their relations, and resolve their differences on the basis of mutual respect.

Chinese foreign ministry spokesman Geng Shuang did not respond directly when asked where and when Xi and Trump would meet, but said that communications were continuing between the two sides.

“About the two leaders’ meeting, I’d like to point out, that President Xi Jinping and President Trump have been keeping contact via various means,” Geng said.

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Lu Xiang, a specialist on US affairs at the Chinese Academy of Social Sciences, said he believed the deal could be signed in China, the US or a third nation.

Lu said Iowa would be an option because Xi had personal links to the agricultural state. Xi made his first visit to Iowa in 1985 as an official from Hebei province to study US agriculture, and returned 27 years later as Chinese vice-president. Also during the trip, Xi met Terry Branstad, Iowa’s governor at the time and now US ambassador to China.

But a Chinese source familiar with internal government discussions said Beijing was taking a cautious approach in choosing a venue.

“Having Xi going to the US just for the trade deal may be seen as China giving too much,” said the source, who declined to be named due to the sensitivity of the matter.

“If the US wants to show sincerity, maybe there should be another round of talks in China [before picking a venue for signing].”

Shi Yinhong, a professor of international relations at Renmin University, said it was too early to discuss where the two leaders would meet and sign the deal.

He said that China’s agreement to buy up to US$50 million worth of agricultural products within two years from the US – in exchange for at least a partial removal of US tariffs – could face challenges, including whether China had enough market potential, and whether the wording in any deal would risk violating World Trade Organisation principles.

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“If we want the deal to last and be implementable, it has to be concrete and hence [the preparation] takes time. If two countries reach a deal very quickly, it will be generalised, ambiguous and have big potential to blow up in the future,” said Shi, who is also a government adviser.

“I don’t see enough evidence to suggest that bilateral ties have improved to the extent that both sides can reach a concrete and implementable agreement in the short term.”

A phone call over the weekend among Chinese Vice-Premier Liu He, US Trade Representative Robert Lighthizer and US Treasury Secretary Steven Mnuchin had resulted in a “consensus on principles”, according to statements from both sides.

On Monday, a commentary by Taoran Notes, a social media account affiliated with China’s Economic Daily, said that Beijing’s core demands – including the removal of all US tariffs – had not changed.

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Lu said a deal on goods purchases and opening up of the Chinese market was within reach, but the US side should abandon “the wishful thinking” that structural issues could be resolved quickly.

He said the possibility that Trump would flip-flop – as he did in pressuring Mexico to agree to a revised North American trade deal earlier this year – could not be ruled out.

“Both sides, especially the US, need a deal by the end of the year,” he said. “The deal would carry substance but it won’t be as much as the deal agreed two years ago when Trump paid a state visit to China.” At that time, both countries reached a package of deals worth of more than US$250 billion, including massive Chinese investment in US natural gas.

In the Bloomberg interview, Ross admitted that the phase one agreement was “particularly complicated” and that the US was “making sure that each side has a very correct and clear, detailed understanding of what each side has agreed to”.