Timeline: the long road to a US China trade deal

Robert Lighthizer, the US trade representative, and Liu He, China’s vice-premier, are poised to plunge back into face-to-face negotiations to end their trade war — with a new round of talks in Beijing this week and another in Washington next week.

The goal is to have a deal in hand by the end of the two sessions in time for a presidential summit between Donald Trump and Xi Jinping some time in May.

An agreement could still slip as has happened several times over the past five months since Mr Trump and Mr Xi agreed to launch the negotiations following the G-20 summit in Buenos Aires, Argentina.

Xi Jinping’s speech to the Belt and Road Forum last week included a long list of opening measures that some felt were specifically addressed a number of US concerns, according to people familiar with Washington’s thinking.

Here are some of the key moments in the talks so far, with the final act still waiting to be written. 

The Truce

December 1, 2018: It all began with a steak dinner at the Park Hyatt in Buenos Aires, when Mr Trump and Mr Xi agreed to set aside months of tariff warfare and seek a resolution to the conflict, which was harming growth and unsettling markets on both sides of the Pacific Ocean. On Air Force One that night, as he flew back to Washington, Mr Trump said an “incredible” deal was in store, with a myriad of Chinese concessions to come. He put Mr Lighthizer in charge of the peace negotiations after Steven Mnuchin, the Treasury secretary, and Wilbur Ross, the commerce secretary, failed in their attempts to settle the trade dispute. 

US President Donald Trump, Secretary of State Mike Pompeo, national security adviser John Bolton and Chinese President Xi Jinping attend a working dinner after the G20 leaders summit in Buenos Aires, Argentina December 1, 2018. © Reuters

The confusion

December 6, 2018: By the end of the first week, the prospects for an agreement were already dimming amid chaos and misunderstanding. Markets balked as Chinese accounts of what had been agreed in Argentina diverged from those offered by the American side, suggesting a wide gap in perceptions about the scope of the negotiations.

Complicating things further, a bombshell was thrown into the talks after it emerged that Meng Wanzhou, the chief financial officer of Huawei, the Chinese telecommunications equipment maker, had been detained on a US extradition request at Vancouver airport. 

The launch

January 7, 2019: After the initial mis-steps, it took more than a month since Buenos Aires for the US and China to be in a position to launch face-to-face negotiations. Mr Lighthizer dispatched Jeff Gerrish, his deputy, to Beijing, along with a broader delegation of US officials to begin tackling the nitty-gritty details of what a deal could look like. Both sides sought to dismiss Ms Meng’s detention as a separate law enforcement matter — evidence that Mr Xi and Mr Trump wanted to plough ahead with an agreement. Progress had been limited, but at least the negotiations had gotten off the ground. 

Huawei chief financial officer Meng Wanzhou leaves her home to attend a court appearance in Vancouver, British Columbia, March 6, 2019. © AP

The letter

January 31, 2019: Mr Liu travelled to Washington at the end of the month, with a letter from Mr Xi in hand that earned him an Oval Office meeting with Mr Trump, and seemed to capture the positive spirit of the talks. “I feel that we have known each other for a long time, ever since we first met. I cherish the good working relations and personal friendship with you. I enjoy our meetings and phone calls in which we could talk about anything,” Mr Xi wrote. The US president called it a “beautiful letter” and said “tremendous progress” had already been made. As well as the letter, Mr Liu had brought a pledge for China to buy more soyabeans to Washington. 

The spats

February 22, 2019: The next time Mr Liu came to Washington, the atmosphere in the talks got testy. Larry Kudlow, the director of the National Economic Council, said that Mr Lighthizer read Mr Liu the “riot act” over China’s unwillingness to budge on key issues, before Beijing softened its positions a little to extend the negotiations. Within the Trump administration, too, tempers frayed. With cameras rolling in the Oval Office, Mr Trump chastised Mr Lighthizer for calling the deal a “memorandum of understanding” — saying such documents “didn’t mean anything”. Mr Lighthizer caved in as Mr Liu chuckled in the background. “We’ll never use the term again,” Mr Lighthizer said. Earlier, Mr Trump had publicly piled more pressure on his USTR to reach an agreement. “We’ve had very good talks. As you know, Mr Lighthizer has done a great job. But it’s only a great job, Bob, if you get it finished, right?,” Mr Trump said. 

Liu He, China’s vice-premier, listens as Donald Trump speaks during a trade meeting in the Oval Office of the White House in Washington on February 22, 2019 © Bloomberg

The reprieve

February 24, 2019: Originally, Mr Trump and Mr Xi had given themselves three months from the Buenos Aires summit to flesh out their peace plan, before a new escalation of tariffs was due to kick in on the night of March 1. Without a deal, levies on $200bn of Chinese goods were set to rise from 10 per cent to 25 per cent. But by the end of Mr Liu’s February visit to Washington, which was extended by a few days to give the negotiators more time to talk, it was clear that this timeline was too tight. In a series of Sunday evening tweets, Mr Trump indefinitely postponed the tariff hikes. “I am pleased to report that the US has made substantial progress in our trade talks with China on important structural issues including intellectual property protection, technology transfer, agriculture, services, currency, and many other issues,” Mr Trump said. “Assuming both sides make additional progress, we will be planning a Summit for President Xi and myself, at Mar-a-Lago, to conclude an agreement. A very good weekend for U.S. & China!” 

The warnings

March 12, 2019: The sense of urgency in the talks dissolved after the threat of higher tariffs receded, and the reality of turning general understandings into a polished legal text meant the number of sticking points ballooned. In both capitals, hawks arguing against a deal became more vocal in arguing against a premature settlement. Speaking before the Senate finance committee, Mr Lighthizer himself was blunt in saying that “major issues” were unresolved and he could not “predict success at this point”. The chill in the talks continued as Mr Trump warned that tariffs could remain in place even after a deal was struck, apparently refuting China’s main demand, which is the swift removal of levies on its imports. At the heart of US frustrations was a sense that China was already retreating on some of its pledges, or not offering enough. 

China’s vice-premier Liu He, centre, with US treasury secretary Steven Mnuchin, right, and trade representative Robert Lighthizer at Diaoyutai State Guesthouse in Beijing on March 29, 2019. © AP

The delay

April 4, 2019: After another visit to Beijing by Mr Lighthizer, in which China’s unwillingness to budge on opening up its market to US technology firms became a big source of friction, Mr Liu was back in Washington in April to make a new attempt at closing a deal. Despite intense speculation that a signing summit between Mr Trump and Mr Xi was imminent, an agreement was delayed until May at the earliest, which set the stage for this week’s new round of negotiations. “We are rounding the turn. We’ll see what happens. We have a ways to go, but not very far,” Mr Trump said. “This is an epic deal, historic, if it happens,” the president said. “It’s the granddaddy of them all”.

Additional reporting by Lucy Hornby in Beijing

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