U.S. President Donald Trump and Chinese President Xi Jinping will meet Saturday on the sidelines of the G-20 political summit in Osaka, Japan. Politico says both leaders are under mounting economic and political pressure to end their trade war. It’s a high-stakes meeting that may or may not mark a turning point in the negotiations after talks slammed to a halt back in May. Each side’s top trade official got things going with a phone call this week. U.S. Trade Representative Robert Lighthizer and Chinese Vice Premier Liu He spoke on the phone on Monday. Lighthizer and U.S. Treasury Secretary Steven Mnuchin are expected to get together with their Beijing counterparts before Trump and Xi go face-to-face on this weekend.
Trump’s trade war is taking a huge toll on U.S. farmers and causing major uncertainty for American businesses. Financial conditions in agriculture have gotten much worse, with that weakness starting to show up in lending data and threatening the broader rural economy. Xi faces economic growth in China that’s lagging, food prices are soaring, and his administration could take a hard knock if Trump follows through on his latest tariff threat.
Mnuchin told CNBC that the U.S. and China are getting much closer to a trade deal than people realize. “We’re about 90 percent of the way there and I think there’s a definite path forward to completing this,” he said on CNBC. Mnuchin also says he’s confident that Trump and Xi will make additional progress in the stalled trade talks. “The message we want to hear is that they want to come back to the table and continue,” he says. “I think there’s a good outcome for their economy and the U.S. economy to get balanced trade and continue to build on the relationship between the two countries.”
What he didn’t provide to CNBC was additional details on what the final 10 percent of the agreement entails, or what some of the more important sticking points still are. The outcome of Saturday’s meeting is very important to the global economy and financial markets, which have been shaken up by the 1.5-year trade dispute between the economic giants. A survey of investors says they don’t expect a deal this weekend, but they don’t expect any new tariffs either.