Top U.S. and Chinese negotiators are seeking to narrow differences on an initial trade agreement during a Friday evening phone call, but remain split on key issues.
President Donald Trump had not yet agreed to remove any tariffs as part of a deal, and the size of China’s commitment to purchase U.S. farm products was not yet clear, Commerce Secretary Wilbur Ross said on Friday in an interview on Fox Business Network.
U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin were expected to participate in the phone call with Chinese Vice Premier Liu He which will be held on Friday evening Washington time.
China’s reluctance to commit to a specific amount of farm purchases remains a sticking point in the talks, as is U.S. reluctance to roll back tariffs, people briefed on the negotiations said. The world’s largest economies have been involved in a tit-for-tat trade war that is dragging on global growth.
Trump in October said China’s Liu had agreed to more than double China’s purchases of farm goods to $40 billion to $50 billion annually, but Beijing wants to make purchases based on market needs.
Beijing is insisting that tariffs need to be rolled back as part of any “phase one” deal, but Trump has not agreed to do that.
Ross said it was important to specify a firm commitment, adding that China “can certainly afford to buy $40 billion to $50 billion” in U.S. agricultural products.
“The question is, are they willing to commit to it? And if they are willing to commit, are there any escape hatches to the commitment?” he said.
Ross added it was unclear whether the initial agreement would be finalized after a potential deadline this month evaporated with the cancellation of an international summit in Chile and another round of U.S. tariffs on Chinese imports looming on Dec. 15.
He said there was plenty of time to continue negotiations before the December deadline, but repeated that Trump was happy to proceed with the tariffs if a deal could not be reached.
Ross also said there was a “very high probability” that the United States would reach a final agreement on a phase one trade deal with China.
“The devil is always in the details. And we’re down to the last details now,” Ross said.
Ross’ positive comments echoed those of White House economic adviser Larry Kudlow, who said the two sides were “getting close” to a deal.
The positive comments fueled a rebound in trade optimism on Wall Street, sending the main U.S. stock indexes to record levels. The benchmark S&P 500 .SPX tallied its sixth straight week of gains while the Dow Jones Industrial Average .DJI breached 28,000 for the first time.