The president has signaled a new willingness to make a deal with Mr. Xi, a leader he has treated solicitously and will meet over dinner on Saturday in Buenos Aires.
WASHINGTON — President Trump is projecting a steely facade as he prepares for a critical meeting on trade this weekend with President Xi Jinping of China. But behind his tough talk and threats of higher tariffs is a creeping anxiety about the costs of a prolonged trade war on the financial markets and the broader economy.
That could set the stage for a truce between the United States and China, several American officials said, in the form of an agreement that would delay new tariffs for several months while the world’s two largest economies try to work out the issues dividing them.
Such an outcome is not certain. Administration officials have expressed deep disappointment with China’s response to Mr. Trump’s pressure so far, characterizing it as a list of proposals, transmitted in Chinese, which they say would do little to curb China’s theft of American technology or address its other predatory trade practices.
But Mr. Trump has signaled a new willingness to make a deal with Mr. Xi, a leader he has treated solicitously and will meet over dinner on Saturday in Buenos Aires, after a summit meeting of leaders of the Group of 20 industrialized nations.
The gyrations in the stock market, the rise in interest rates and thousands of layoffs announced by General Motors this week have all rattled Mr. Trump, officials said, fueling his desire to emerge from his meal with Mr. Xi with something he can claim as a victory.
“There’s a good possibility that we can make a deal, and he is open to it,” Mr. Trump’s chief economic adviser, Larry Kudlow, said Tuesday. But if the meeting failed to produce a breakthrough, he said, Mr. Trump was “perfectly happy to stand on his tariff policies.”
At the moment, the administration plans to raise existing tariffs on $250 billion worth of Chinese goods, to 25 percent from 10 percent, on Jan. 1. Mr. Trump has also threatened to impose tariffs on an additional $267 billion of Chinese goods — a step many fear would plunge the two giants into a full-fledged economic Cold War.
If the two leaders agree to talks, however, officials said Mr. Trump would most likely postpone the increase to 25 percent and hold off on any new tariffs. That would be similar to a deal he struck last July with the European Union, in which he agreed to delay auto tariffs in return for a pledge by Europe to buy American soybeans and natural gas.
The divisions inside the West Wing over trade remain fierce, as they have since the beginning of Mr. Trump’s presidency, and the contest for Mr. Trump’s ear will most likely continue until the moment he sits down with Mr. Xi in Argentina.
More mainstream advisers like Mr. Kudlow and the Treasury secretary, Steven Mnuchin, are urging him to compromise, while hard-liners like Peter Navarro, the director of the White House trade office, argue that he should keep ramping up the pressure on China until it folds.
Mr. Navarro, a favorite of Mr. Trump’s, had initially been excluded from the trip to Argentina, which led some to conclude that the hard-liners had lost ground.
