June 27, 2019 / 7:41 AM / a month ago

Trump agrees to no preconditions for meeting with China's Xi - Kudlow

WASHINGTON/BEIJING (Reuters) - U.S. President Donald Trump has agreed to no preconditions for his high-stakes meeting with Chinese President Xi Jinping this weekend and is maintaining his threat to impose new tariffs on Chinese goods, White House economic adviser Larry Kudlow said on Thursday.

FILE PHOTO: U.S. President Donald Trump and China's President Xi Jinping meet business leaders at the Great Hall of the People in Beijing, China, November 9, 2017. REUTERS/Damir Sagolj

Trump’s decision on whether to impose new tariffs on a $300 billion (236.77 billion pounds) list of nearly all remaining Chinese imports will depend on the outcome of the Saturday meeting on the sidelines of a G20 summit in Osaka, Japan, Kudlow told Fox News Channel.

“There are no preconditions,” Kudlow said. “President Trump looks forward to the meeting. We believe it’s quite possible if the meeting goes well that the Chinese will come back to the negotiating table and we might be able to pick up where we left off in May.”

Trump is set to meet Xi for talks in Osaka at 11:30 a.m. (0230 GMT) on Saturday.

Kudlow dismissed as “fake news” reports suggesting that China was insisting on lifting sanctions on Chinese telecom equipment giant Huawei Technologies Co Ltd [HWT.UL] as part of a trade deal and that the Trump administration had tentatively agreed to delay new tariffs on Chinese goods.

The Wall Street Journal reported that Xi planned to present Trump with terms for ending the trade dispute, including removing a ban on the sale of U.S. technology to Huawei, citing Chinese officials with knowledge of the plan.

The South China Morning Post jointly reported that Washington and Beijing had agreed to a tentative truce in their trade dispute that would delay new U.S. tariffs, citing sources.

Kudlow said Trump was comfortable with imposing additional tariffs on Chinese goods, but “if something good comes out of those talks or China were to offer us a good deal in the future then we might be willing to change some of our views.”

Kudlow said Trump would continue to insist on structural changes to China’s policies to protect American intellectual property and to end the forced transfer of technology to Chinese firms, two U.S. demands at the core of the trade dispute.

“Enforcement has to be part of the story and we don’t know how this is going to end,” Kudlow said. “Folks ought to stop forecasting. Let’s just see what happens at these talks.”

HUAWEI DEMANDS

In Beijing, China’s commerce ministry said the United States should immediately remove sanctions on Huawei, but did not link the demand directly with the Trump-Xi meeting.

China opposes U.S. abuse of export controls and urges the United States to return to a track of cooperation, said the spokesman, Gao Feng.

Trump has suggested previously that the Huawei sanctions, which ban the firm from buying U.S. components and software on national security grounds, could be part of a trade deal with China.

Huawei has denied its products pose a security threat.

“We urge the United States to cancel immediately sanctions on Chinese companies including Huawei to push for the healthy and stable development in Sino-U.S. ties,” Gao said, when asked whether the two sides were expected to reach a deal on measures facing Huawei and other Chinese tech firms.

Gao noted that Xi told Trump during a phone call last week - a gesture that rekindled hopes of a deal - that he hoped the United States could treat Chinese firms fairly.

Earlier in May, the United States accused China of reneging on pledges to reform its economy, infuriating Beijing and leading to a collapse in trade talks.

The U.S. Commerce Department announced last week it was adding several Chinese companies, and a government-owned institute involved in supercomputing with military applications, to its national security “entity list” that bars them from buying U.S. parts and components without government approval.

China would consider putting foreign firms on a list designating them “unreliable” if they adopted discriminatory measures against Chinese entities, hurt its industries and threaten its national security, Gao said.

Details of the list would be released soon, he said.

‘PREVENT ESCALATION’

On May 31, the commerce ministry said it was working on an “unreliable entities list” after the United States imposed additional tariffs on $200 billion of Chinese goods and added Huawei to the U.S. export blacklist.

China’s foreign ministry spokesman Geng Shuang stressed that China would not be scared by U.S. threats of more tariffs.

“The Chinese people are not afraid of pressure and never buy this kind of strategy,” he told reporters.

In a commentary on Thursday, the ruling Communist Party’s People’s Daily said a U.S. attempt to win a “quick and easy” trade war had proven to be futile and the Chinese people must not be fearful.

“It’s very clear that some people in the United States are insisting on curbing China’s development using excuses of trade frictions,” it said. “At this moment, fear is no use.”

“If China concedes blindly under the pressure of (U.S.) hegemony, this will really be a volte-face-esque historic mistake.”

Reporting by Jeff Mason in Washington and Yawen Chen in Beijing; Additional reporting by Martin Pollard and Ben Blanchard in Beijing; Writing by David Lawder and Ryan Woo; Editing by Clarence Fernandez, Robert Birsel and Lisa Shumaker

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