U.S. Trade Representative Robert Lighthizer, Treasury Secretary Steven Mnuchin and Chinese Vice Premier Liu He discussed progress in the talks in a phone call Monday.
China’s Ministry of Commerce said the two sides discussed how to resolve core concerns and reached consensus on how to resolve related issues, according to an informal translation of an official readout of the call.
Trump said the two sides were in the “final throes” of negotiating an agreement.
“It’s going very well but at the same time we want to see it go well in Hong Kong and I think it will,” he told reporters at the White House on Tuesday. “I think that President Xi [Jinping] can make that happen and I know him. I know he’d like to make it happen.”
The president is under pressure to sign a bill threatens Hong Kong’s special trade status if China infringes on the autonomy of the former British colony that is now under Beijing’s control as a special administrative region. The legislation, which passed overwelmingly in Congress, has angered Beijing, which has threatened to take countermeasures if it becomes law.
Still, China’s state-run English language tabloid Global Times said on Sunday the two sides are “very close” to a phase one trade deal and China remains committed to a second or even third phase of negotiations.
Chinese officials briefing foreign visitors in Beijing last Friday were also positive about the trajectory of the talks, but said the scope and scale of U.S. tariff de-escalation is still an open question, according to one person familiar with those discussions.
Trump’s tough talk that China wants a deal more than the U.S. conceals a real desire in the administration to get a market-calming agreement, said another person close to the talks. At the same time, Mnuchin and senior adviser Jared Kushner are pushing the president to close the deal, the person added.
“The deal is largely there if Trump offers the substantial tariff relief the Chinese want,” the person said, adding the depth of any tariff rollback the president agrees to would reveal the extent to which Trump wants to seriously engage in subsequent phases of trade talks.
Trump wants a phase one deal to force China to significantly increase its purchases of U.S. agricultural goods. China is also expected to provide new openings to its financial services market and implement certain intellectual property protections.
Still, the preliminary agreement is not expected to fully address U.S. core concerns over China’s practice of forcing American companies to hand over technology to do business there.
Chinese President Xi Jinping made his first public comments about a phase one deal last week, saying China wants to reach an interim trade deal but “on the basis of mutual respect and equality.”
Trump has said he will impose tariffs on almost all remaining Chinese imports, including many consumer goods, on Dec. 15. A phase one deal would most likely involve the president removing that threat.
China is also pushing the U.S. to rollback a Sept. 1 round of tariffs that hit roughly $110 billion worth of Chinese goods.
Economists from the Federal Reserve Bank of New York released a report on Monday that says U.S. businesses and consumers are paying for the tariffs on China despite Trump’s repeated claims that Beijing is footing the bill for the increased import duties.