Eugene Hoshiko/Getty Images; Reuters

The so-called phase-one trade agreement announced by the US and China last month might not be finalized until next year.

China indicated this month that it expected the US to lift punitive duties as part of a broader agreement.

But President Donald Trump could be reluctant to give in to those demands ahead of his reelection bid.

Visit Business Insider's homepage for more stories.

The US and China have appeared increasingly divided over a tariff rollback and other key trade terms, casting doubt on whether an interim agreement announced last month could be signed before the end of the year.

China indicated this month that it expected the US to lift punitive duties as part of a broader agreement on technology rules, farm purchases, and financial-sector access. But without concrete concessions on issues like intellectual property, President Donald Trump could be reluctant to give in to those demands ahead of his reelection bid.

"The Chinese know Trump doesn't want trade-war headwinds messing with his reelection bid, so I doubt they'll let up on tariff reductions," said Jared Bernstein, a top economic adviser in the Obama administration. "I'm just not sure Trump's willing to go there yet. If he does, a lot of people are going to be reasonably asking what was the point of the whole thing."

Reuters reported on Wednesday that a deal might not be finalized until next year, citing anonymous sources close to the Trump administration.

Asked whether the first part of an interim trade agreement with China was expected to be signed in 2019, a White House representative told Business Insider that "negotiations are continuing, and progress is being made on the text of the phase-one agreement."

But the largest economies have struggled to resolve the structural issues at the center of the impasse, which has led to punitive tariffs on thousands of products. The US is scheduled to expand those taxes to virtually all imports from China in December, a threat Trump has repeatedly doubled down in recent days.

"We'll see what happens, but I'm very happy right now," he said during a Cabinet meeting on Tuesday. "If we don't make a deal with China, I'll just raise the tariffs even higher."

Earlier this month, Trump denied China's claim that the US had agreed to lift some tariffs as part of a broader agreement. China has also not publicly confirmed agricultural commitments the Trump administration demanded.

Read more: GOLDMAN SACHS: Equity traders are expecting an economic acceleration — and these 12 stocks are best positioned to skyrocket as conditions improve

NOW WATCH: A big-money investor in juggernauts like Facebook and Netflix breaks down the '3rd wave' firms that are leading the next round of tech disruption