China Agrees to Resume U.S. Trade Negotiations

President Donald Trump and Chinese President Xi Jinping seemed to be inching closer to signing a trade agreement, but obstacles still remain. WSJ takes a look back at how the world’s two largest economies got here.

President Donald Trump and Chinese President Xi Jinping seemed to be inching closer to signing a trade agreement, but obstacles still remain. WSJ takes a look back at how the world’s two largest economies got here.

By Chao Deng & Lingling Wei For the Wall Street Journal | Updated May 7, 2019 10:07 a.m. ET

After two days of uncertainty, Beijing concluded that a full breakdown in talks may be difficult to repair and would exact economic costs

BEIJING—China is sending its top trade envoy to Washington to resume negotiations and confront U.S. demands that Beijing detail the laws it would change as a part of a trade deal, ahead of a deadline set by President Trump to raise tariffs on Chinese goods.

After two days of uncertainty in which President Trump called for the higher tariffs and Chinese officials considered pulling out of the talks, Beijing announced Tuesday that Vice Premier Liu He will travel to Washington for negotiations starting Thursday, a day later than planned.

At the top of the agenda is a U.S. demand that a trade agreement lay out an inventory of laws and regulations that Beijing must revise for compliance, according to people briefed on the negotiations. China has objected to including the list, the people said. The U.S., though, sees it as essential to ensuring China delivers on promises of structural change.

The disagreement over the text of the trade agreement adds to a pile of still-to-resolve issues that include China’s subsidies to domestic companies and opening key Chinese markets, such as cloud computing. It also drove President Trump to Twitter on Sunday to threaten higher tariffs, the people said. U.S. Trade Representative Robert Lighthizer has said the punitive levies on $200 billion of Chinese goods will be raised to 25%, from 10%, on Friday.

In pushing ahead with Mr. Liu’s trip to Washington, China’s leadership decided a full breakdown in the talks may be difficult to repair and would exact costs on the Chinese economy, according to Chinese officials. In doing so, Chinese leaders broke from a public position that Beijing wouldn’t negotiate under threat.

“There is definitely a sense of urgency that we should get this resolved sooner rather than later,” said one of the officials, who is involved in policy-making. “An all-out trade war is in no one’s interest.”