Trump and Xi may reach a deal at the G-20, but it may not be something either wants, says Wells Fargo

  • U.S. President Donald Trump and China leader Xi Jinping will likely strike a deal at their G20 meeting, but "I don't think it's going to be the deal that either side wants," says Kirk Hartman, global chief investment officer at Wells Fargo Asset Management.
  • "Both sides have so much at stake here that they going to reach some kind of agreement," Hartman told CNBC.
President Donald Trump, left, and Xi Jinping, China's president, shake hands during a news conference at the Great Hall of the People in Beijing, China, on Thursday, Nov. 9, 2017.
Qilai Shen | Bloomberg | Getty Images
President Donald Trump, left, and Xi Jinping, China's president, shake hands during a news conference at the Great Hall of the People in Beijing, China, on Thursday, Nov. 9, 2017.

Expect a deal between U.S. President Donald Trump and his Chinese counterpart Xi Jinping at the G-20 summit in Argentina, but manage your expectations, a Wells Fargo executive told CNBC on Friday.

"I am optimistic that they will strike a deal. I don't think it's going to be the deal that either side wants, but I think there will be some concessions," said Kirk Hartman, global chief investment officer at Wells Fargo Asset Management. "I think this is more about protecting U.S. technology as much as it is trade, so I think you will see some comments on that front."

Hartman said the U.S. may delay higher tariffs on Chinese imports that were due to take effect in January. Washington and Beijing may also agree to meet for further negotiations.

Trump told reporters Thursday that he was "close" to doing something on trade with China but added he wasn't sure if he wanted to do it. "Because what we have right now is billions and billions of dollars coming into the United States in the form of tariffs or taxes, so I really don't know," he said.

Meanwhile, there were reports that White House advisor Peter Navarro would be attending the dinner between Trump and Xi. News of his attendance dampened hopes that a trade deal could be hatched at the meeting given his longstanding hawkish tone on U.S.-China trade.

Elsewhere, the Wall Street Journal reported that officials from both governments said the U.S. and China are exploring a trade pact that would halt further tariffs from Washington in exchange for new talks looking at major changes to Beijing's economic policies.

"Both sides have so much at stake here that they going to reach some kind of agreement," Wells Fargo's Hartman said, adding that any agreement at the meeting "will be extremely positive for the market."

— CNBC's Saheli Roy Choudhury contributed to this report.