Dive Brief:

• The U.S. and China extended a two-day round of trade talks to a third day, according to multiple news reports. Donald Trump tweeted Tuesday morning, "Talks with China are going very well!" without offering further details.
• The Wall Street Journal, citing sources briefed on the negotiations, reported the two nations made progress on trade issues related to China's purchases of U.S. goods and services but said the "the two sides are far from striking a deal.
• The U.S. delegation, which traveled to Beijing for the discussions, will return to the U.S. Wednesday. "The delegation will now report back to receive guidance on the next steps," the United States Trade Representative (USTR) said in a statement Wednesday morning.

Dive Insight:

The optimistic tone continues surrounding the first face-to-face talks between the U.S. and China since agreeing to a 90 day tariff "cease-fire."

Members of the U.S. delegation told reporters the talks progressed well. Chinese Foreign Ministry spokesman Lu Kang said the extension of the trade talks to an additional day showed but sides were "indeed very serious" about resolving trade issues.

Beyond praise, Chinese and American leaders have been light on the details. USTR said officials discussed "ways to achieve fairness, reciprocity, and balance in trade relations between our two countries," but did not offer specifics on any progress made.

News reports citing sources familiar with the negotiations overall indicate that the relatively superficial issues — such as Chinese purchases of American goods and services — are seeing some progress. "The talks also focused on China’s pledge to purchase a substantial amount of agricultural, energy, manufactured goods, and other products and services from the United States," USTR said.

But deep-seated, structural issues remain contentious. In fact, the two sides may be even further apart on these underlying issues like forced technology transfer and intellectual property protection, among others, according to Bloomberg.

The reported lack of progress on structural trade issues is not necessarily surprising, as analysts predicted resolving these would take much longer than the allotted 90 days.

Still, it's concerning for business managers hoping for relief from tariffs. Without a resolution between the U.S. and China, tariffs on $200 billion worth of goods from China will rise from 10% to 25% on March 2. China is expected to retaliate in kind. For now, it's a wait-and-see game for businesses and a time to plan for the worst-case scenario.