The U.S. trade war with China is “on hold” after the world’s largest economies agreed to drop their tariff threats while they work on a wider trade agreement, U.S. Treasury Secretary Steven Mnuchin said on Sunday.
Lindsay Dunsmuir and Howard Schneider of Reuters have the news:
“We are putting the trade war on hold. Right now, we have agreed to put the tariffs on hold while we try to execute the framework,” Mnuchin said in a television interview on “Fox News Sunday.”
On Saturday, Beijing and Washington said they would keep talking about measures under which China would import more energy and agricultural commodities from the United States to narrow the $335 billion annual U.S. goods and services trade deficit with China.
During an initial round of talks this month in Beijing, Washington demanded that China reduce its trade surplus by $200 billion. No dollar figure was cited in the countries’ joint statement on Saturday.
The Chinese Embassy in Washington did not return a request for comment on Mnuchin’s statement.
Don Lee and Chris Megarian of the Los Angeles Times reported that China’s efforts to lower the trade deficit may not have an impact:
The downshift comes as President Trump has reached out to Chinese President Xi Jinping for greater support in his efforts to persuade North Korean ruler Kim Jong Un to give up his nuclear arsenal. Trump is scheduled to meet with Kim in Singapore on June 12.
Analysts expressed doubts that China’s commitment to “significantly increase purchases” of U.S. agricultural goods and other items would make a meaningful dent in the trade deficit. They also warned that the more cooperative tone may not last long, especially as Trump has given conflicting signals and orders involving China trade and relations.
“While there will be periodic ceasefires, U.S.-Chinese trade relations will remain tense, with more barriers to trade and investments,” said David Loevinger, a former senior Treasury Department official for China affairs.
Mnuchin acknowledged as much, noting that Trump “can always decide to put the tariffs back on if China doesn’t go through with their commitments.”
Marisa Schultz of The New York Post said Mnuchin declined to say China will meet the deficit reduction goal:
After rounds of trade talks with China, Mnuchin said: “We have an agreement with China that they will substantially agree to it.”
The secretary declined to say whether the agreement sets a specific target of $200 billion to reduce the trade deficit, but he said the deal has goals for each industry.
“We are immediately going to follow this up with [Commerce] Secretary [Wilbur] Ross going there with very hard commitments in agriculture, where we expect to see a very big increase – 35-40 percent increases – in agriculture this year alone,” Mnuchin said.
“In energy, doubling the energy purchases. I think that you could see $50, $60 billion a year of energy purchases over the next three to five years. And strategically, that’s very important for us and very important for them.”