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Xi and Trump may meet next month at G20 amid China-US tensions

Donald Trump shakes hands with Xi Jinping. Photo: Getty Images

The White House is moving ahead with plans for US President Donald Trump to sit down with Chinese President Xi Jinping amid increasing tensions between the two countries over trade during a G-20 summit meeting next month in Argentina, according to a Wall Street Journal report on Thursday.

The Trump administration — pushed by Treasury Secretary Steve Mnuchin and National Economic Council (NEC) Director Larry Kudlow — has been in contact in recent days with Beijing to go ahead with the meeting with Xi in Buenos Aires, the report said.

The NEC and Treasury take lead roles in the planning for the G-20 meeting, rather than administration hard-liners on China, most prominently US Trade Representative Robert Lighthizer. Trump has sided with Lighthizer on tariffs, even when that has torpedoed talks with the Chinese. Carrying through on imposing more tariffs, as Trump has threatened to do, could derail the summit plans as well.

"There's some movement toward" a meeting in Argentina at the G-20 summit next month, Kudlow said. Still, he added that talks or the topics the leaders would address have not "been set in concrete."

"They have lots to talk about. So we'll see," Kudlow told CNBC's "Squawk on the Street".

"I think the Chinese have got to come and say, 'OK, we're going to change our structure, we're going to abide by the laws and we're going to make a fair trade deal that will help the American economy and the American workforce,'" Kudlow said. "They've got to do that. They have not done that yet."

"I believe it's always better to talk than not to talk," Kudlow said. "But thus far their response has been unsatisfactory to our asks."

The Trump administration's demands, he said, "are pretty common sense. Europe shares our view, and Japan shares our view and Canada shares our view. So, we'll see how it plays out."

Citing unnamed officials familiar with the matter, the Wall Street Journal said that Trump has dedicated a team to plan for his summit with Xi. One of the people involved in the planning is Christopher Nixon Cox, grandson of former US President Richard Nixon, whose 1972 trip to China eventually led to diplomatic relations between the two nations.

Meanwhile, the planning team on the Chinese side includes Vice Premier Liu He, who is also Xi's top economic adviser, the report said. A spokeswoman at the Chinese embassy in Washington did not immediately respond to a request for comment about whether planning for the reported summit is proceeding.

Dennis Wilder, a former CIA chief of China studies and senior East Asia director at the National Security Council, told the South China Morning Post that Chinese officials have indicated the need for the meeting.

"China is eager to engage the [US] president directly because they feel that the people negotiating for the president don't always know his real bottom line," Wilder said. "So they want to find out from President Trump directly just what it is going to take to get out of the trade war."

"The only way I can see this being solved is at the leader-to-leader level meeting," he said, adding that lower-level officials would struggle to resolve the impasse "without the leaders giving them indications of exactly what a deal might look like".

Trump has been sending mixed signals recently on whether the United States and China could reach a trade agreement.

During a rally in Topeka, Kansas last Saturday, the president said: "Right now we are working on a deal with China. They have been hitting us hard, but relations are good at the minute."

Three days later, Trump told reporters in the Oval Office that China was "not ready" to reach a trade deal and repeated a threat to hit the world's second-largest economy with further punitive tariffs.

"China wants to make a deal, and I say they're not ready yet," Trump said. "And we've cancelled a couple of meetings because I say they're not ready to make a deal." No details were given about the meetings Trump said were cancelled.

When asked if he would respond with further tariffs if China were to hit back at the United States with new tariffs of its own, Trump said, "Sure, absolutely."

A trade conflict between Washington and Beijing has escalated as the countries slap mounting tariffs on imports. Most recently, the Trump administration imposed duties on $200 billion worth of goods from China, prompting Beijing to put tariffs on $60 billion worth of US goods.

Trump has threatened even more duties. Issues that need to be addressed include US concerns about alleged theft of intellectual property by Chinese companies and the trade deficit between the countries. The unresolved tensions have raised fears about widening economic damage that could hit American consumers and companies.

In addition, the US president has accused China of targeting farmers with tariffs in order to damage Republicans in the upcoming midterm elections. At a United Nations Security Council meeting last month, Trump charged that Beijing does not "want me or us to win because I am the first president to ever challenge China on trade."

China has denied trying to influence the US election, in which Democrats are favored to take control of the House from Trump's Republican Party.

In recent days, both Vice President Mike Pence and Secretary of State Mike Pompeo have used increasingly tough rhetoric toward China. Trump has repeatedly called Xi a friend, but admitted that tensions over trade may have strained their relationship.

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