(Bloomberg) -- High-level trade talks between the U.S. and China were set to wind up Friday in Beijing, with Treasury Secretary Steven Mnuchin sounding a positive note as the clock ticks down to reach a deal agreement that would avert a tariff increase on Chinese goods by March 1.
“Productive meetings with China’s Vice Premier Liu He and @USTradeRep Amb. Lighthizer,” Mnuchin said in tweet, without giving further details. Mnuchin and U.S. Trade Representative Robert Lighthizer were also expected to meet Chinese President Xi Jinping.
As of Friday afternoon, there had been no visible progress on efforts to narrow the gap around structural reforms to China’s economy that the U.S. has requested, according to three U.S. and Chinese officials who asked not to be identified because the talks were private. They said it would likely take a meeting between Xi and President Donald Trump to seal a deal.
The U.S. and China were scrambling on Friday to produce a memorandum of understanding that would pave the way for a meeting between the two presidents, the Financial Times reported, citing people briefed on the negotiations.
“Just wait for a while and the answer will be revealed soon,” Chinese Foreign Ministry spokesman Geng Shuang told regular news briefing Friday in Beijing.
The U.S. has also not relented on demands for China to dial back government subsidies for state-owned enterprises and improve corporate governance, one of the people said, an extremely sensitive issue that is seen as a non-starter for Chinese leaders.
The uncertainty has weighed on investors, with Asian stocks retreating from the highest levels since October following a dip in U.S. equities. Both sides have an incentive to strike a deal: Trump has repeatedly linked market gains to his administration’s policies, while Bloomberg Economics estimates China would avoid a 0.3 percent drag on 2019 gross domestic product if the trade truce holds.
Trump earlier this week said he was open to delaying the deadline to more than double tariffs on $200 billion of Chinese goods if the two countries were close to a deal that addresses deep structural changes to China’s economic and trade policies. Bloomberg News reported late Wednesday that he’s considering pushing back the deadline by 60 days.
Asked Thursday if the Trump administration was considering extending the deadline for tariff increases, White House economic adviser Larry Kudlow said no decision has been made.
Negotiators in Beijing “are soldiering on” and the “vibe” is good, Kudlow said on Fox News, adding that he was briefed by U.S. officials earlier Thursday. “They are going to be meeting with President Xi tomorrow, which is a very good sign. They are moving through all of the issues. They are getting the job done.”
Kudlow later told reporters at the White House that he’s “cautiously optimistic” on the outcome of the talks with China.
A meeting date between Trump and Xi has not been set and it is unlikely the pair can meet before the March 1 deadline.
White House adviser Kellyanne Conway said on Tuesday that Trump wants to meet Xi “very soon.”