Cabinet-level trade talks between the U.S. and China kicked off here Thursday, with President Donald Trump announcing that he will sit down Friday with top Chinese negotiator Liu He.
"We just completed a negotiation with China. We're doing very well; we're having another one tomorrow. I'm meeting with the vice premier over at the White House. And I think it's going really well," Trump told reporters in the afternoon on the South Lawn of the White House.
"So we had a very, very good negotiation with China," he said.
Liu said prior to the talks that the Chinese delegation "came to the negotiations with utmost sincerity" and "is willing to carry out serious dialogue with the U.S. side on issues of mutual concern, including trade balance, market access and investor protection," the official Xinhua News Agency reported.
With less than a week until higher American tariffs hit Chinese goods, U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steve Mnuchin greeted Liu at the USTR office here Thursday morning.
The agenda for the talks includes structural reforms to China's economy, such as how its currency is regulated.
Selling of the yuan has accelerated as Chinese economic growth slows. Some in the Trump administration argue that Beijing is allowing the currency to weaken to alleviate the impact of tariffs and support its exporters. The administration labeled China a currency manipulator for the first time in 25 years and has been pressing for a halt to the yuan's slide by getting such institutions as the International Monetary Fund involved. The Chinese side is believed to have made reform proposals to address this issue, such as improving the transparency of foreign exchange intervention.
The U.S. Chamber of Commerce's head of international affairs, Myron Brilliant, told reporters he believed that "there's even the possibility of a currency agreement this week."
"I think that could lead to a decision by the U.S. administration to not put forth a tariff rate hike on Oct. 15," Brilliant said in a conference call, which followed a meeting Wednesday between Liu and senior Chamber officials, according to media reports.
China's imports of U.S. farm goods were also discussed, as well as steps to free up Chinese financial and other markets and protect intellectual property.
In the two-day deputy-level talks through Wednesday, the Chinese side proposed to expand purchases of American agricultural products such as soybeans. U.S. farm exports to China dropped 53% in 2018, hurting Trump's support base in the U.S. Midwest. The move bodes well for Beijing as well, as rising prices of imported soybeans have pushed up food prices in China.
The Dow Jones Industrial Average was briefly up more than 250 points Thursday morning on the prospect of the trade talks stretching over two days. Dow futures had dropped more than 300 points after the South China Morning Post reported following Wednesday's market close that the Chinese delegation sought to return to Beijing after just one day of talks because of the lack of progress.
The Trump administration is set to raise punitive duties on $250 billion in Chinese goods to 30% from 25% on Oct. 15, further escalating the trade war.
While both the U.S. and China face the risk of slowing economic growth, the Trump administration appears to be sticking to its hard line.
Earlier this week, Washington increased pressure on Beijing over its treatment of China's Uighur Muslim minority by announcing commercial and visa restrictions. China has pushed back against what it calls interference in its internal affairs.