WASHINGTON — A day after agreeing to resume trade talks with China, President Donald Trump and his top advisers said no timeline existed for reaching a deal and suggested that the two sides remained as far apart as they were when talks broke up in May.
The comments came as the administration continued to ease restrictions on China, removing eight companies from the Commerce Department’s blacklist and taking steps to allow Huawei, the Chinese telecommunications giant, to purchase American technology. Those steps, while welcomed by U.S. businesses, fueled concerns among some lawmakers that Trump was giving away too much in return for vague promises from President Xi Jinping of China to buy more American goods.
“We’re moving along toward a reciprocal but a good trade deal, a fair trade deal,” Trump said of China during remarks in Seoul, South Korea, on Sunday. “And we’ll see where that goes, but we had a very, very good feelings with President Xi and myself.”
The truce reached at the Group of 20 summit in Osaka, Japan, over the weekend will forestall another round of punishing tariffs Trump had threatened to impose on nearly all Chinese imports. But it did little to resolve the Trump administration’s primary concerns, including its insistence that China agree to codify intellectual property protections and other changes in Chinese law.
The ability to resolve those concerns, including those that led to the breakdown in talks, is only expected to get harder on both sides of the Pacific, as Trump heads into a reelection campaign and Xi faces pressure to reinvigorate China’s slowing economy. That political calculus seems to have pushed both leaders to agree to a truce that could perpetuate the trade dispute but prevent an escalation that could destabilize the world’s two largest economies.
Larry Kudlow, director of the White House National Economic Council, said that no timetable existed for completing negotiations but that the United States was hoping to capitalize on the progress made during talks that broke down in May, which he said had gotten the two countries 90% of the way to a deal.
“That 90% number is fair, although the last 10% could be the toughest,” Kudlow said on “Fox News Sunday.” “The rest of it is going to go on for quite some time frankly.”
Trump faces a crosscurrent of pressures at home as his reelection bid shifts into high gear, including signs of a slowing economy. The president, who has staked his reelection on strong economic growth, faces risks from a trade war that has begun to hurt farmers, manufacturers and other businesses with exposure to China.
Yet the president, who has singled out China as an “economic enemy,” is wary of coming away with nothing after two years of bruising negotiations, allowing Democrats to argue that his strategy of using tariffs as pressure was a failure.
Republicans are also uncomfortable with the trade war, which has hurt businesses in their home states, making them politically vulnerable. But they are also worried that Trump will agree to a weak deal and that he bargained away too much when he agreed to let U.S. companies sell technology and parts to Huawei less than two months after the Commerce Department labeled it a national security threat.
The administration had essentially blacklisted Huawei over concerns that it posed a national security threat and that its efforts to dominate the next generation of wireless technology, known as 5G, would put the United States at a disadvantage. Top officials, including Secretary of State Mike Pompeo and Vice President Mike Pence, have publicly warned that Huawei poses a security threat and urged other nations not to use its telecom equipment.
The United States also removed eight Chinese companies from its entity list last week, including Xiamen Sanan Optoelectronics and Hubei Flying Optical. The technology companies were recently added to the Commerce Department’s red-flag list of “unverified” businesses that U.S. companies should treat with caution.
While it remains unclear exactly what type of technology Huawei will now be allowed to buy from American companies, the fact that the president appeared to be using the telecom giant as a pawn in broader trade negotiations drew swift condemnation from some of his biggest allies in Congress.
Sen. Marco Rubio, R-Fla., said on Twitter that relaxing the restrictions on Huawei would “destroy the credibility of his administrations warnings about the threat posed by the company” and that such warnings would no longer be taken seriously.
On Sunday, Sen. Lindsey Graham, R-S.C., said that fully reopening the United States’ doors to Huawei was a bad idea.
“I don’t know what he agreed to regarding exceptions to the ban,” Graham said on CBS’ “Face the Nation.” “If they’re minor exceptions, that’s OK, but if we’re selling Huawei major technology, that would be a mistake.”
Kudlow tried to assuage those concerns Sunday, telling “Fox News Sunday” that this was not “general amnesty” for Huawei, and that companies would be permitted to conduct business only if there were no national security risks.
He added that while Trump had made significant concessions to China to restart negotiations, Beijing was expected to reciprocate by making “large-scale purchases” of U.S. agricultural products while negotiations continued.
Stock markets around the world were expected to open higher on Monday as a result of the thawing relations. Business groups praised Trump for backing away from his threat to impose tariffs on an additional $300 billion worth of products from China.
“We are encouraged the talks are restarting and additional tariffs are on hold, and we look forward to getting more detail on the president’s remarks on Huawei,” said John Neuffer, president of the Semiconductor Industry Association.
But the administration’s tariffs on $250 billion worth of imports remain, along with China’s retaliatory tariffs, and uncertainty is growing about whether the trade war will ever fully end. A senior Trump administration official said before the G-20 summit that optimism would be tempered after China suddenly backed away from commitments in May. With no timelines for negotiations and only vague promises about Chinese purchases of U.S. agricultural products, the relief that no additional tariffs are imminent could be short-lived.
“It’s a good thing that tariffs have been postponed, but we really need to resolve these structural issues and resolve the tariffs,” said Craig Allen, president of the U.S.-China Business Council. “The short-term costs we’re paying here are being borne by American companies. The long-term beneficiaries will be the Europeans and the Japanese.”
China faces problems that have made the protracted dispute more challenging.
China’s debt-laden economy is slowing — and would slow even more if the Chinese government had not encouraged local governments to go on a borrowing binge this year. Growth in industrial production has slackened. Only stringent, police-enforced controls on international movements of money prevent many Chinese from trying to send their savings out of the country to seemingly safer destinations overseas with greater rule of law.
Against that backdrop, Chinese experts were divided this weekend about the outcome of the trade talks between Trump and Xi.
Some noted that China had achieved three key goals. It avoided the additional tariffs Trump had threatened. It gained at least some weakening of the sanctions on Huawei. And it won the resumption of trade talks without having to accept the draft text that had been negotiated by the end of April, which China’s leadership rejected mainly because it required broad changes in the nation’s laws.
“This is a major win for Xi Jinping — it seems like President Trump is willing to make concessions on almost all fronts,” said Bo Zhiyue, deputy dean of the New Era Development Research Institute at Xi’an Jiaotong-Liverpool University in Suzhou, China.
But other features of the agreement provoked grumbles. The truce allows the United States to continue collecting 25% tariffs on nearly half its imports from China. And, at least according to Trump, China agreed to resume buying American farm goods after intermittently halting purchases over the last year to protest Trump’s tariffs.
Hu Xijin, the outspoken editor of the nationalistic Global Times news outlet, groused on Twitter that the United States was only giving up some restrictions on Huawei that it imposed 1 1/2 months ago. He noted that another concession by Trump consisted of not imposing further tariffs that he had started threatening only in early May.
“Some Americans still unsatisfied?” he tweeted.
An underlying issue for China is that it is largely dependent on the United States to buy its goods.
Few markets other than the United States appear ready or willing to accept China’s surplus in manufactured goods. The European economy is weak. Many developing countries are deep in debt — partly because of Chinese lending in connection with Xi’s global infrastructure program, the Belt and Road Initiative — and reluctant or unable to borrow more money.
For those reasons, many of the most vocal China hawks in the United States believe that China has little choice but to strike a deal with the United States and that Trump is wise to remain patient.
“I think he’s going out of his way to show the American people, capital markets, corporate America and the global corporate community that he’s gone out of his way to get some kind of accommodation out of China,” said Steve Bannon, who is Trump’s former strategist. “This is deeper than the Cold War, and it’s not going to get done overnight.”