The latest round of U.S.-China talks wrapped up in Beijing on Wednesday, with U.S. Treasury Secretary Steve Mnuchin calling the meetings "productive."
Meanwhile, President Donald Trump and senior White House officials are working to salvage political support for a revised trade pact with Mexico and Canada.
In China, Wednesday's round of talks concluded slightly later than scheduled. Afterward, Mnuchin tweeted a photo showing him, U.S. Trade Representative Robert Lighthizer and Chinese Vice Premier Liu He.
"Ambassador Lighthizer and I just concluded productive meetings with China's Vice Premier Liu He. We will continue our talks in Washington, D.C. next week," the tweet said.
The White House has ramped up pressure to reach a trade deal with China in the next two weeks, warning that the U.S. is prepared to walk away from the negotiations. Acting White House Chief of Staff Mick Mulvaney said Tuesday that the outcome will be known in the next couple of weeks "one way or the other."
As the high-level talks in Beijing got underway, China on Wednesday took another step in opening its $44 trillion financial sector to the world, announcing plans to remove limits on ownership in local banks and to scrap size requirements for foreign firms that operate onshore.
Among the changes, overseas insurance groups will be allowed to set up units in the world's second-biggest economy, the China Banking and Insurance Regulatory Commission said. The rule changes are seen as an incremental step along the path to opening China's financial system, months after foreign firms were permitted majority stakes in securities joint ventures.
The moves came as the Trump administration is making its impatience known after four months of intense negotiations, shifting away from its mostly optimistic messaging about the prospect of a deal to end a trade war that's resulted in tariffs on hundreds of billions of dollars in goods.
"It won't go on forever," Mulvaney said Tuesday at the Milken Institute Global Conference in Los Angeles. "At some point in any negotiation you go, 'We're close to getting something done, so we're going to keep going.' On the other hand, at some point you throw up your hands and say, 'This is never going anywhere.'"
He also said there's no "fever" on the part of the White House to finalize an accord.
A collapse of negotiations might reverse momentum in the U.S. and China, dousing hopes that the world economy might be able to shake off trade-war risks. The conflict has weighed on confidence and affected shipments, with nine of the 10 gauges tracked by Bloomberg to assess the health of global trade showing figures below their average midpoints.
REVISING NAFTA
After a Tuesday meeting in the White House on North American trade, several Democrats said Trump put on a charm offensive, soliciting their feedback on what he would need to do to win their support for an updated version of the North American Free Trade Agreement.
It was much different from the combative approach he has taken with Democrats in recent weeks while they ramp up investigations into his finances and businesses. White House officials have said Trump really wants the Canada-Mexico trade deal to be successful, and he knows he needs support from Democrats to achieve it.
"I think if you leave the White House today, the tone of the conversations were pretty good," said House Ways and Means Committee Chairman Richard Neal, D-Mass.
Trump's courtship of Democrats on trade comes as he's simultaneously trying to prevent Republicans from bolting. A number of Republicans have objected to Trump's tough tactics in the trade talks and want him to start offering Canada and Mexico some immediate concessions.
Senate Finance Committee Chairman Charles Grassley, R-Iowa, told the White House this week that the trade agreement cannot gain approval in the GOP-controlled Senate unless Trump first lifts steel and aluminum tariffs against Mexico and Canada. Trump has said he is reluctant to do that before both countries agree to import quotas, but patience among Republicans for that negotiating style has worn thin.
"Well, the administration feels that this is a great negotiating tool and they feel that it's a separate issue, but I don't think it is," said Sen. Joni Ernst, R-Iowa. "I think we need to see action on the tariffs in order to get trade done."
Sen. Tim Scott, R-S.C., who has also raised concerns and who is meeting with White House officials about trade issues today, said that "something's going to have to give, or we won't have a successful implementation or vote on the" trade deal.
Trump has used a take-it-or-leave-it approach when negotiating with both Congress and foreign leaders in the past, but he is now handling the North American trade talks differently. Democrats have said they will insist on strict enforcement of labor standards in exchange for their vote, and they want union leaders to be on board with any deal. Top union officials have so far refused to endorse the deal until changes are made.
Democrats have been careful, though, and have not flatly rejected the deal like they did many of the White House's other tax and economic proposals. That's in part because Lighthizer has worked closely with Democrats and union leaders throughout the negotiations to keep them updated on developments and seek their input. At the White House meeting Tuesday, Democrats praised Lighthizer in front of the president.
White House officials believe the trade deal they are trying to strike with China will not need congressional approval, but the Canada-Mexico deal will because it revises an existing trade agreement.
White House officials have signaled they want the Canada-Mexico trade deal to be completed by the end of this year, before election-year politics take priority in 2020.
House Majority Leader Steny Hoyer, D-Md., who also met with Trump on Tuesday, did not rule out the possibility that the trade agreement might be passed by the end of the year.
It's "too early to tell," he said. "We need to know about enforcement; we need to know about other things."
Information for this article was contributed by staff members of Bloomberg News and by Erica Werner and Damian Paletta of The Washington Post.
A Section on 05/02/2019