The US 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, US Treasury Secretary Steven Mnuchin says.
- Larry Kudlow says too soon to lock in $US200b figure for China’s promised purchases
- Mr Kudlow says there is no agreement for a deal yet
- Wilbur Ross will go to China to look at areas where there will be significant export increases
Mr Mnuchin and US President Donald Trump’s top economic adviser, Larry Kudlow, said the agreement reached by Chinese and American negotiators on Saturday (local time) set up a framework for addressing trade imbalances in the future.
“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,” Mr 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 $US335 billion ($445 billion) annual US goods and services trade deficit with China.
During an initial round of talks this month in Beijing, Washington demanded China reduce its trade surplus by $US200 billion ($266 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 Mr Mnuchin’s statement.
Tension between the two sides has been growing since the Trump administration proposed tariffs of $US50 billion ($66 billion) on Chinese goods and said it might extend the levies to an additional $US150 billion ($199 billion).
China responded with its own measures targeting US agriculture.
In response to Mr Mnuchin’s comments, Democratic Senator Chuck Schumer of New York, a frequent Mr Trump critic, said he thought it would be a mistake for Mr Trump to settle for “a promise to buy goods” with so many larger issues on the table.
“If President Xi is going … to fail to take strong actions on intellectual property, cyber theft, and American companies having free access to sell goods in China … we will have lost,” Mr Schumer said.
No deal reached yet
Mr Kudlow told CBS’s Face the Nation it was too soon to lock in the $US200 billion figure for China’s promised purchases.
“The details will be down the road,” he said.
In addition, he told American ABC’s This Week the broader issues were still in play, and China had “structural reforms” such as lowering tariffs and non-tariff barriers that would allow the United States to boost exports.
Mr Trump was in a “very positive mood about this,” Mr Kudlow said.
However, he said there was no trade deal yet reached.
“There’s no agreement for a deal,” Mr Kudlow said.
“We never anticipated one. There’s a communique between the two great countries, that’s all.
“And in that communique, you can see where we’re going next.”
US agricultural exports to China to increase by up to 40pc
One next step will be dispatching Commerce Secretary Wilbur Ross to China to look at areas where there will be significant increases, including energy, liquefied natural gas, agriculture and manufacturing, Mr Mnuchin and Mr Kudlow said.
Mr Mnuchin said the United States expected to see a big increase of between 35 per cent and 40 per cent in agricultural exports to China this year alone and a doubling of energy purchases over the next three to five years.
“We have specific targets. I am not going to publicly disclose what they are,” Mr Mnuchin said.
“They go industry by industry.”
Saturday’s statement made no mention of whether there would be a relaxation of paralysing restrictions on Chinese telecommunications equipment maker ZTE Corp imposed last month by the US Commerce Department.
The action was related to violation of US sanctions on Iran and North Korea and banned American companies from selling semiconductors and other components to ZTE, causing the Shenzhen-based company to cease most operations.
Mr Trump said last week he had directed Mr Ross to put ZTE back in business, but Mr Kudlow said any changes would be minimal.
“If any of the remedies are altered they are still going to be very, very, tough, including big fines, compliance measures, new management, new boards,” he said.
“Do not expect ZTE to get off scot-free. Ain’t going to happen.”