China and U.S. come close to a trade deal

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U.S. President Donald Trump will meet Chinese Vice Premier Liu He at the White House on Thursday. There is growing speculation that negotiations over a trade deal between the world’s biggest economies is entering the last stages.

Talks are continuing in Washington where Liu held meetings with U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin on Wednesday. The goal over the next several days is to strike an agreement on the core issues so Trump and Chinese leader Xi Jinping can hold a ceremony to sign a deal.

Drafts of an agreement are being drawn that will end a nearly year-long trade war. It would give Beijing until 2025 to meet commitments on commodity purchases and allow American companies to wholly own enterprises in the Asian nation, according to three people familiar with the talks.

“Both sides do want an agreement but they want to make sure it’s the right deal for their respective domestic audience,” said Tai Hui, Asia-Pacific chief market strategist at JPMorgan Asset Management in Hong Kong.

On Wednesday morning, Trump’s top economic adviser talked about progress but cautioned that a final deal to end the trade war remained elusive. Negotiators are “making good headway,” White House economic adviser Larry Kudlow told reporters. “But we’re not there and we hope this week to get closer,” he said.

A meeting date between Trump and Xi could be announced as early as Thursday, people familiar with the plans said. 

While White House officials have expressed cautious optimism in recent days about securing a deal in the near future, a U.S. decision to tentatively sell fighter jets to Taiwan may affect the outcome of this week’s talks.

One of the final issues is what will happen to the tariffs the two sides have imposed on about $360 billion of each other’s goods in the past nine months. Trump has suggested that at least some of the tariffs will stay in place, saying they are necessary “for a substantial period of time” to ensure Beijing keeps up its end of the bargain.