WASHINGTON — President Trump will meet with China’s top trade envoy at the White House Friday afternoon amid growing expectations that the United States could soon announce a trade truce that would help defuse tensions with China.
After months of the United States pushing China for a comprehensive trade deal, negotiators now appear to be focused on securing a more limited agreement that would help alleviate some of the economic pain that the trade war is inflicting across the global economy.
On Wall Street, stock and commodity prices climbed, suggesting investors were growing more optimistic about the outlook for the economy, which has been battered by the ongoing trade war.
The S&P 500 was up roughly 1.8 percent shortly before 11:30 a.m., putting the benchmark stock market index on track to snap a three-week string of losses. The tech-heavy Nasdaq composite index rose 1.9 percent. The Russell 2000 index of small capitalization stocks, typically viewed as closely tied to the health of the American domestic economy, rose 2.7 percent.
Benchmark crude oil prices rose 1.5 percent. Prices for key industrial metals such as copper and iron ore, often looked to as a barometer of the outlook for China’s large industrial economy, rose as well.
Negotiators were set to continue talks on Friday morning, but people familiar with the discussions said the two sides were weighing an agreement that would have China buy more American agricultural goods and limit its currency intervention, among other potential provisions. In exchange, the United States may agree not to go ahead with a plan to raise tariffs to 30 percent on $250 billion worth of goods on Oct. 15.
American officials have emphasized that the final decision over whether to agree to an “early harvest” agreement will rest with Mr. Trump. But with the president’s domestic problems mounting around an impeachment inquiry and with another painful tariff increase set to go into effect, Mr. Trump could be eager to announce that China has agreed to even a few of America’s demands.
On Friday, Mr. Trump continued to suggest he was more open to a deal than he has seemed in the past. “Good things are happening at China Trade Talk Meeting,” he said in a tweet. “Warmer feelings than in recent past.”
He added that he would not need congressional approval once a deal is negotiated, saying “I sign it myself on behalf our Country. Fast and Clean!”
Such a move would constitute a compromise by the American team, which has insisted they are pushing for a comprehensive trade deal to correct longstanding problems with China’s economy, including a requirement that American companies hand over trade secrets and China’s subsidization of state-owned firms.
Chinese officials have expressed willingness to update some intellectual property protections, open their automotive and financial markets to American companies, increase their purchases of American agricultural products, and take other steps. However, they have resisted the Trump administration’s demands to make more significant changes to structural issues they say are key to managing their economy and protecting national security.
But pressure is growing to at least pause the trade war, which is set to worsen if the two sides do not make progress. In addition to the October tariff increase, Mr. Trump plans to impose another round of levies in December, at which point the United States will tax nearly every product China exports to America. That has prompted concern from farmers and businesses, who say the tariffs are weighing on sales and investment. While the president and his advisers maintain that the trade war is having a limited impact on the economy, they have admitted that these tariffs could impact American consumers as the holiday season approaches.
Business groups have welcomed the idea of announcing an agreement that would help to cool tensions that have spiraled as the Trump administration has placed tariffs on more than $360 billion of Chinese products, and China has retaliated with levies of its own.
On Thursday, a U.S. Chamber of Commerce official who had recently met with both negotiating teams said he was hopeful that the countries would announce a deal that would set rules around how China manages its currency and prevent Mr. Trump’s planned tariff increase from going into effect next week.
Myron Brilliant, the executive vice president and head of international affairs at the Chamber of Commerce, said that the two sides might announce a more comprehensive pact that strengthened China’s protections for intellectual property and further opened markets like financial services and automobiles to American companies.
The Trump administration could also contemplate removing the threat of additional tariffs that are scheduled to be imposed in December or roll back some of the tariffs it has already levied on more than $360 billion of Chinese goods based on the package of offers brought by the Chinese negotiating team, he said.
Officials from both sides have sounded relatively optimistic headed into this week’s talks. But Mr. Trump’s penchant for keeping negotiating partners guessing, and the on-again, off-again history of the trade war, has continued to cast uncertainty over the gathering. The countries appeared on the cusp of an agreement in April, only to have the deal fall apart and result in an escalation that has resulted in even more tariffs on Chinese and American goods.
Mr. Trump and the Chinese vice premier, Liu He, will meet in the Oval Office at 2:45 p.m.
Lower-level negotiations between the countries began in Washington on Monday. On Thursday, Robert Lighthizer, Mr. Trump’s top trade negotiator, and Treasury Secretary Steven Mnuchin met with the for negotiations that dragged on late into the day.