Blackstone Group (BX) CEO Steve Schwarzman, a confidante of President Donald Trump, said in a new interview that the United States and China will reach a trade deal “in the next two months.”
Schwarzman said he backs a potential agreement but cautioned that it will fall short of U.S. demands.
“What we're going to have is a very good start,” Schwarzman says. “But you won't get 100% of what some people would say, well, we should get all that.”
“Like most things in American politics, you will have some divisiveness on that,” adds Schwarzman, who for decades has had business ties in China and runs a scholarship program at Tsinghua University in Beijing.
Trade talks between senior officials of the U.S. and China will resume next week, the White House announced on Tuesday. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin will travel to Beijing for negotiations starting April 30.
Liu He, Chinese President Xi Jinping's top economic adviser, is expected to visit Washington for additional negotiations May 8.
The White House told CNN that talks will “cover trade issues including intellectual property, forced technology transfer, non-tariff barriers, agriculture, services, purchases, and enforcement.”
Front and center is whether Trump will lift the over $250 billion in tariffs that he slapped on Chinese goods—and what he will demand in return.
“We'll have a successful outcome if you measure by what is in the possible zone,” Schwarzman says. “That's infinitely better than where we were.”
Schwarzman made the remarks to Editor-in-Chief Andy Serwer in a conversation that aired on Yahoo Finance in an episode of “Influencers with Andy Serwer,” a weekly interview series with leaders in business, politics, and entertainment.
After he graduated from Harvard business school, Schwarzman joined Lehman Brothers, where he rose to managing director at age 31. In 1985, he co-founded the private equity firm Blackstone Group, which raised $830 million for its first fund. The company currently has $512 billion in assets under management and 23 offices worldwide.
‘What we’re going to have is a very good start’
Schwarzman said the potential deal will frustrate some American onlookers, but that blame for an unsatisfactory outcome should ultimately be placed on China.
“The Chinese system doesn't really make itself susceptible of complying,” he says. “A very big government sector in their economy and all kinds of different incentives and controls. And so to wean China off of that system is not about a trade negotiation with a short-term solution.”
After additional growth, China will become more amenable to restrictions like those the United States has sought on intellectual property, Schwarzman noted.
“As China gets more wealthy, it'll be easier for them to change,” he said. “As China manufactures their own intellectual capital, they will want to protect it. And so I think what we're going to have is a very good start.”
Andy Serwer is editor-in-chief of Yahoo Finance.