The Private Equity Legend Talked Trade at a Reuters Event this Week.

Blackstone Group CEO Stephen Schwarzman believes that the U.S. and China will reach an agreement on trade. The private equity chief said he expects “good faith” at the start of negotiations during an interview at a Reuters event in Manhattan.

“It looks like things have lined up to go forward and I think there’s good faith at this point to start things,” Schwarzman said.

After 16 months of back-and-forth, the two nations are reportedly working on a “Phase One” deal. Also, China has requested that the U.S. repeal tariffs that went into effect in September. The country also wants the Trump administration to eliminate tariffs poised to take effect in mid-December.

The Blackstone Group CEO Talks Trade

Right now, investors remain cautious about the state of trade affairs. Markets hope that the two sides will reach a deal by the end of the month. However, there appears to be a hold up on the location of a possible meeting between President Trump and Chinese President Xi Jinping.

Should that be resolved, the Blackstone Group CEO expects quick progress on a second phase to negotiations.

“If agreement number one is done, which I would expect would happen, then it will lead to the second agreement, which will have more things in it, so I think there’s [a] reason for optimism in terms of what’s going on,” Schwarzman said.

Schwarzman did state that he doesn’t have any expectation for a recession, despite the hold up in a deal. He cited stronger consumer consumption and wages outpacing inflation.

Related: Blackstone Chief Schwarzman: Private Assets Valuations Too High, Bubble-like