US, China revive trade talks: Can a deal be made?

Trade talks between the U.S. and China will resume on Tuesday, two months after negotiations broke down.

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The talks resume amid an array of disputes that has grown to include tension over Chinese tech giant Huawei.

Presidents Donald Trump and Xi Jinping agreed in June to revive efforts to end the costly fight over China's technology ambitions and trade surplus.

Trump has repeated his claim that the United States is prospering by "taking in tens of billions of dollars" from his tariff hikes on Chinese products. In reality, those are paid by U.S. companies and consumers who buy Chinese goods.

"I think it's going to happen, to be honest," former economic adviser to former President Ronald Reagan Art Laffer told FOX Business Monday. "It just makes no sense for it to not happen. It's good for China. It's good for the U.S. It's good for everyone. But these are the negotiations, and you'll have those ups and downs ... and it's not there yet."

Treasury Secretary Steven Mnuchin and Trade Representative Robert Lighthizer will hold talks on Tuesday and Wednesday in Shanghai with a delegation led by China's economy czar, Vice Premier Liu He.

Chinese leaders are resisting U.S. pressure to roll back plans for government-led development of industry leaders in robotics, artificial intelligence and other technologies.

Washington complains those efforts depend on stealing or pressuring foreign companies to hand over technology.

Some American officials worry the U.S. is losing its lead.

The June agreement to resume negotiations helped to calm jittery financial markets despite warnings by economists that with both sides still far apart on critical issues, the fragile truce likely will soon fall apart.

Tensions worsened when, after talks broke down in May, the Trump administration imposed curbs on U.S. technology sales to Huawei, the biggest global maker of network gear for phone companies and the No. 2 smartphone brand. U.S. officials view Huawei as a national security threat and warn that its equipment could be used for cyberespionage.

"The only problem with these deals is the have internal, domestic politics to deal with," Laffer told FOX Business. "China has domestic industries to deal with that are tough, and so [does the U.S.]. The steel industry doesn't want a great deal. There are a lot of industries that don't want it. It's tough to make it happen."

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The tariff hikes are battering exporters on both sides and disrupting trade in goods from soybeans to medical devices. China's imports of American goods fell 31.4 percent in June from a year ago while exports to the United States fell 7.8 percent.

China agreed earlier to narrow its multibillion-dollar trade surplus with the United States by purchasing more American soybeans, natural gas and other exports. But it revoked that pledge after one of Trump's tariff hikes last year.

"Both countries want a good deal," Laffer told FOX Business. "It's a win-win for everyone in the world."

FOX Business' Blair Shiff and The Associated Press contributed to this article.