Trump open to deal with Xi at dinner but with conditions: Kudlow

By Roberta Rampton

WASHINGTON (Reuters) - U.S. President Donald Trump is open to reaching a deal on U.S.-China trade irritants over dinner on Saturday with Chinese leader Xi Jinping but is ready to hike tariffs on Chinese imports if there is no breakthrough, White House economic adviser Larry Kudlow said on Tuesday.

Days before the high-stakes dinner, it was unclear whether the two sides had agreed on a formal agenda for the leaders' conversation after the G20 summit in Buenos Aires. Kudlow said there were no scheduled talks on the ground for their advisers.

Kudlow said Trump had told advisers that "in his view, there is a good possibility that a deal can be made, and that he is open to that."

But he said "certain conditions have to be met," listing intellectual property theft, forced technology transfer, ownership of American companies in China, high tariffs and non-tariff barriers on commodities, and commercial hacking as examples of issues that "must be solved."

Kudlow declined to comment on whether China had made offers of concessions.

The White House sees the dinner, which Kudlow hinted would involve Argentine beef, as an opportunity to "turn the page" on a trade war with China. But he said the White House has been disappointed so far in the Chinese response to trade issues.

"Their responses have disappointed because ... we can't find much change in their approach," he said, declining to comment on specifics.

"President Xi has an opportunity to change the tone and the substance of these talks," Kudlow told reporters at the White House. "President Trump has indicated he is open - now we need to know if President Xi is open."

If there is no progress, Trump is prepared to raise tariffs on $200 billion of imports to 25 percent from current levels of 10 percent, and could add tariffs on another $267 billion of imports, Kudlow said.

"As we've all learned, he means what he says," Kudlow said.

Asked whether the two sides had agreed on a list of agenda items for the leaders to discuss, Kudlow said: "We're in some significant preparation on all that."

Kudlow said he was not sure whether Trump and Xi would agree to a joint statement at the end of their dinner, as is typical for a meeting between two world leaders.

"It's a dinner party-kind-of-thing," Kudlow said.

He declined comment on who would attend the dinner. Trump's wife Melania Trump will accompany the president to Buenos Aires. Secretary of State Mike Pompeo, U.S. Trade Representative Robert Lighthizer, national security adviser John Bolton and Kudlow will also be at the G20.

Trump has a packed schedule of bilateral meetings in Argentina, including one with Russian President Vladimir Putin.

Trump is also slated to take part in a signing ceremony for the trade agreement with Mexico and Canada that replaces the North American Free Trade Agreement, Kudlow said. Details on the date for the ceremony were not immediately available.

As far as the formal G20 talks go, Kudlow said deputies were still working on a possible joint agreement, known as a communique.

"I don't think anybody on our team is on pins and needles about the communique. If we got one, it's got to be something we agree with. If we didn't get one, there'd be no tears shed," he said.

Kudlow was involved in a clash between the White House and allies in the G7 group of nations in June, when Trump rejected a statement agreed to by his fellow leaders. Shortly afterward, Kudlow had a heart attack, from which he has since recovered.

"I had to rewrite a communique in Quebec this spring, which I did, taking names and kicking butts of some very nice world leaders. Then I went home and had a heart attack, so - hoping not to go through that process again," Kudlow said.

(Reporting by Roberta Rampton; Additional reporting by Steve Holland and Jeff Mason; Editing by Chizu Nomiyama and Grant McCool)