President Donald Trump says he's 'very close to doing something' on China trade

U.S. President Donald Trump and Chinese President Xi Jinping are expected to have a dinner together at G20 summit in Argentina. Photo / AP

President Donald Trump said he is very close to "doing something" with China ahead of a planned meeting with President Xi Jinping, raising expectations again that the two leaders may be able to hash out a ceasefire in their trade war.

U.S. and Chinese officials have been working for weeks on the contours of a possible deal for the two leaders to be announced following their dinner on Saturday on the sidelines of the Group of 20 summit in Buenos Aires and a road map for talks to follow.

Those discussions, according to people familiar with them, have centred on the possibility of a truce in which the U.S. would delay ramping up tariffs on China in exchange for Chinese concessions. The two leaders would also agree on a "framework" for further talks, U.S. officials such as Commerce Secretary Wilbur Ross have said publicly.

The two sides have also been eyeing a possible mid-December trip to Washington by Liu He, Xi's top economic adviser, according to two people familiar with the discussions. But whether that visit actually takes place would depend on a positive outcome in Buenos Aires.

In the lead-up to Saturday's dinner Trump has oscillated between trying to appear tough and committed to his tariffs-driven strategy and opening the door to a deal with Xi. That tension surfaced again on Thursday.

"I think we're very close to doing something with China, but I don't know that I want to do it, because what we have right now is billions and billions of dollars coming into the United States in the form of tariffs or taxes," Trump told reporters as he departed the White House to travel to the G-20.

"I really don't know, but I will tell you that I think China wants to make a deal," he continued. "I'm open to making a deal, but frankly, I like the deal we have right now."

Trump didn't elaborate further. He has previously said he's happy maintaining tariffs on Chinese imports if the two nations don't settle their trade differences.

The U.S. president has imposed duties on US$250 billion in Chinese imports in recent months. A 10 per cent tariff on US$200b of those goods is due to rise to 25 per cent on January 1. Trump has also threatened to impose tariffs on the remaining US$267b worth of Chinese products imported last year.

"Billions of Dollars are pouring into the coffers of the U.S.A. because of the Tariffs being charged to China, and there is a long way to go," Trump said on Twitter earlier Thursday. "If companies don't want to pay Tariffs, build in the U.S.A. Otherwise, lets just make our Country richer than ever before!"

While Trump and his advisers have expressed optimism that the two sides will reach a deal at the meeting, they have also warned that China hasn't yet offered the sort of meaningful concessions that the Trump administration wants to see.

A Chinese response to U.S. demands sent earlier this month amounted to a rehash of previous commitments and pledges that Xi had made in recent speeches, according to people familiar with the discussions. Larry Kudlow, the top White House economic adviser, this week also told reporters that Trump needed Xi to offer more at his meeting for a breakthrough.

But U.S. officials including Kudlow have also repeatedly said in recent weeks that any agreement to fully resolve trade differences between the U.S. and China would likely take months of difficult negotiations to reach. A ceasefire, analysts say, would at least delay the risk of a further escalation in the trade war while talks proceed.

Trump has been demanding that Beijing resolve a series of long-standing U.S. trade grievances such as accusations China steals U.S. intellectual property and forces technology transfers by U.S. companies doing business in China. Hawks in his administration have also been eager to see broader changes in Chinese industrial and technology policy.