The mood in Beijing for a trade deal is pessimistic because of President Donald Trump's reluctance to roll back tariffs, which China believed the US had agreed to, told a government source CNBC's Eunice Yoon.
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The United States and China agreed to work on a limited "Phase 1" trade agreement in early October. China has been pushing to remove the additional fees imposed on each other's products at various stages, as part of the agreement. Earlier this month, spokesman for the Chinese Ministry of Commerce, Gao Feng, said the two sides have reached agreement on the toll roll-up.
However, Trump said a week ago that he has not agreed to scrap tariffs on Chinese goods, contrary to the signal from China and dampen hopes of a forthcoming resolution on a looming trade conflict.
The Chinese are closely watching the political situation in the United States, including weapons hearings and the presidential election, the source said, adding that officials are wondering if it is more rational to wait for things since it is unclear what Trump's position will even be about some months.
There is disagreement on issues such as a specific number of agricultural purchases, the source said. The Chinese are resisting because they may be at risk of alienating other trading partners, the source told CNBC.
The trade war between the world's two largest economies has continued for almost two years. The Trump administration has dropped tariffs on more than $ 500 billion in Chinese goods, while Beijing has imposed about $ 1
Trump hopes to resolve outstanding deals with Beijing's trade practices, including the forced transfer of technology and theft of intellectual property, while securing more Chinese purchases of US agricultural goods.
The White House did not immediately respond to CNBC's request for comment.
19659002] The Chinese Ministry of Commerce said on Sunday that the two sides had "constructive discussions" about "each other's basic concerns" and agreed to remain in close contact. Meanwhile, White House economic adviser Larry Kudlow said on Friday that the two countries were "approaching" to reach a trade agreement.