Trump's Hanoi walk-out leaves negotiations with China in doubt

Trump has promised month-end summit with Xi

Handout via Getty Images

A handout photo shows President Donald Trump and North Korean leader Kim Jong-un during their second summit meeting at the Sofitel Legend Metropole hotel on Feb. 27, 2019, in Hanoi, Vietnam.

President Donald Trump's decision to walk away from nuclear talks with North Korean leader Kim Jong Un without an agreement has led to fresh uncertainty over his proposed trade deal with China, people familiar with the state of negotiations say.

Trump has promised a month-end summit with his Chinese counterpart Xi Jinping, held in the luxurious confines of his Mar-a-Lago club in south Florida, to finalize a deal that would ease tariffs and boost Chinese purchases of US goods.

But without a firm agreement in place for the two leaders to sign, Xi has balked at the prospect of traveling nearly 8,000 miles without a guarantee Trump won't leave the table, according to the people familiar with the talks. Chinese officials are no longer planning for Xi to travel to Florida at the end of the month, the people said.

That has left negotiators scrambling to solidify a tentative agreement hashed out during a round of talks in February.

The China deal has been at the heart of Trump's economic and diplomatic efforts over the past year, starting with his abrupt imposition of steep tariffs on billions in Chinese imports in 2018. The failure to close a deal in Hanoi has led to speculation that Trump will strike any deal he can with Beijing and call it a win, something his advisers -- including lead negotiator Robert Lighthizer -- have said they will not let happen.

Already, Trump has delayed additional tariffs that were set to be slapped on China at the beginning of March, believing significant progress was being made toward a deal.

On Friday, however, Trump's ambassador to China, Terry Branstad, told The Wall Street Journal in an interview that no date has been set for a trade summit in Florida since talks are still continuing between US and Chinese negotiators.

"Both sides agree that there has to be significant progress, meaning a feeling that they're very close before that happens," Branstad told the newspaper. "We're not there yet. But we're closer than we've been for a very long time."

Trump, however, denied on Friday that talks with China had hit a rough patch. "I haven't heard that. I think they're doing well," he told reporters at the White House. Instead, he raised the stakes of a potential trade deal, suggesting an agreement would boost equity markets.

"I think you're going to see a very big spike. A lot of people are waiting to see what happens with the China deal," he said before traveling to survey storm damage in Alabama.

"We'll do very well either way, with or without a deal," he added. "I'm confident. But if we don't make a very good deal for our country, I wouldn't make a deal. If this isn't a great deal, I won't make a deal."

Trump's walk-out in Hanoi illustrated his non-traditional approach to diplomacy. Ordinarily, agreements between the US and other countries are finalized in advance of a presidential summit, leaving leaders to act out public camaraderie following lengthier, more detailed talks between underlings.

Trump has upended that practice, believing he is best positioned to secure concessions and complete agreements in direct talks with his foreign counterparts. In Hanoi, that left him empty-handed halfway across the globe, though he and his aides insist there was still progress made even without a final joint statement.

Trump's singular focus on trade means he places even more emphasis on his own ability to hammer out agreements that are beneficial to the United States. While he has dispatched envoys to China, led by Treasury Secretary Steven Mnuchin, to strike a trade pact, he's also stated that a final accord will only be reached through direct talks between himself and Xi.

"No final deal will be made until my friend President Xi, and I, meet in the near future to discuss and agree on some of the long standing and more difficult points," Trump wrote on Twitter in January.

That's left open the prospect that he'll reject whatever deal is struck at the lower level. And it's raised concerns in Beijing that a Mar-a-Lago summit -- the second between the two men, who met at the resort in April 2017 -- could end embarrassingly for Xi, whose willingness to meet at Trump's club rather than a neutral location could already be seen as a concession in the trade talks.

A central hang-up between the two sides remains the enforcement mechanisms that would verify Chinese compliance with the deal's terms, according to people familiar with the negotiations. While a preliminary agreement had been struck between US and Chinese teams during the last round of talks last month, it has not yet received final sign-off by either country's leader.

Trump has vowed that any deal will result in large Chinese purchases of American goods, including soybeans and energy like oil and gas. In return, the US would lift at least some of the harsh tariffs Trump has slapped on Chinese imports.

While US officials once expressed a desire to force major changes to China's industrial system as part of a grand trade bargain, Branstad seemed to downplay those expectations in his interview with The Wall Street Journal.

"We've got to be realistic that this is a one-party authoritarian system. We don't see that changing," he said.

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