SHANGHAI: China expressed confidence on Wednesday that it can reach a trade deal with the United States, despite fresh warnings from President Donald Trump that he would revert to more tariffs if the two sides cannot resolve their differences.
The remarks by the Chinese Commerce Ministry follow a period of relative quiet from Beijing after Trump and Chinese leader Xi Jinping reached a temporary truce in their trade war at a meeting over dinner in Argentina on Saturday.
In a brief statement on its website, the ministry said China would try to work quickly to implement specific issues already agreed upon, as both sides “actively promote the work of negotiations within 90 days in accordance with a clear timetable and road map”.
“We are confident in implementation,” it said, calling the latest bilateral talks “very successful”.
The threat of further escalation in the trade war between the world’s two largest economies has loomed large over financial markets and the global economy for much of the year, and investors initially greeted the ceasefire with relief.
But the mood has quickly soured on scepticism that the two sides will be able to reach a substantive deal on a host of highly divisive issues within the 90-day negotiating period that was agreed.
Failure would raise the specter of fresh U.S. tariff action and potential Chinese retaliation as early as March.
Global financial markets tumbled on Tuesday as doubts over what could realistically be accomplished in the tight negotiating window added to concerns about fading global growth.
Major Chinese stock indexes were down by close to 1 percent in morning trade on Wednesday.
Trump, via Twitter, held out the possibility of an extension of the three-month ceasefire but warned that tariffs would be back on the table if the talks failed to bear fruit.
“The negotiations with China have already started. Unless extended, they will end 90 days from the date of our wonderful and very warm dinner with President Xi in Argentina,” Trump tweeted.
He said he would place “major tariffs” on Chinese goods imported into the United States if his administration is unable to reach an effective trade deal with Beijing.
“We are either going to have a REAL DEAL with China, or no deal at all – at which point we will be charging major Tariffs against Chinese product being shipped into the United States. Ultimately, I believe, we will be making a deal – either now or into the future,” Trump wrote in a post within minutes of the Commerce Ministry statement.
Officials from the U.S. and a number of other major economies have often criticized China for its slow approach to negotiations to open its markets and not following through on commitments.
China has said comparatively little about the Trump-Xi agreement after senior Chinese officials briefed the media following the leaders’ meeting, and there have been some differences between U.S. and Chinese accounts of what the deal entails.
“Officials now face the difficult task of fleshing out a deal that is acceptable to the Chinese but also involves significant enough concessions not to be torpedoed by the China hawks in the Trump administration,” Capital Economics said in a note this week.
“We wouldn’t be surprised if no agreement can be reached within 90 days, with the higher tariff rate coming into force only a few months later than originally planned.”
A Chinese official told Reuters officials were “waiting for the leaders to return” before publicizing details.
President Xi Jinping and his most senior officials, including the commerce minister and the country’s two top diplomats, are due back in China on Thursday having visited Panama and Portugal since leaving Argentina.
On Wednesday, the Global Times tabloid, which is run by the Chinese Communist Party’s main newspaper, said myriad statements from the Trump administration about the deal – including the agreement that China would buy US$1.2 trillion in additional U.S. goods – were designed to highlight or even exaggerate facets of the deal that benefited the United States.
“Reaching an agreement within three months is a spur to not only China, but also the US. If the two sides fail to reach a deal, all the White House promises will be invalid,” it said.
“It will be a win-win situation if a deal is realized. But if not, more fights and talks will continue alternately for a longer while. Chinese society should maintain a calm attitude.”
(Reporting by John Ruwitch and Wang Jing in Shanghai and Makini Brice in Washington; Editing by Kim Coghill)