“As we always said we don't want to start the trade war but we are not afraid,” Xi said. “When necessary we will fight back but we have been working actively to try not to have a trade war.” “We want to work for a Phase 1 agreement on the basis of mutual respect and equality," Xi told the group.
The delegation from Bloomberg's New Economy Forum, a conference held in Beijing this week, included former Secretary of State Henry Kissinger, former Treasury Secretary Hank Paulson, former U.S. Trade Representative Mike Froman and other dignitaries.
During the meeting at Beijing's ornate Great Hall of the People, Xi reiterated to the group China's stance that a deal requires “mutual respect and equality.”
The Wall Street Journal reported Thursday that China's lead negotiator in the talks, Vice Premier Liu He, invited his U.S. counterparts to Beijing for more talks, suggesting hopes for progress.
The latest flareup in trade tensions came after President Donald Trump imposed punitive tariffs last year on billions of dollars' worth of Chinese exports to the US, seeking to ramp up pressure for changes in Chinese trade and investment policies.
China has retaliated with tariff hikes of its own. After gradual escalations of sanctions and halting progress in trade talks this year, the two sides are working toward what they say will be a preliminary agreement to pave the way for tackling more complex issues.
However, the prospects even for such a “Phase 1” deal are uncertain. China has said it wants a promise from the U.S. side to gradually reduce the tariffs already in place. It's unclear if the U.S. side would be willing to do that.
Meanwhile, Trump agreed to hold off on raising tariffs further last month pending the negotiations. But the U.S. side still is due to hike tariffs on $160 billion worth of imports from China next month.
That increase would boost prices on smartphones, laptops and many common household goods, right before Christmas.