US wants 'concrete' trade action from China within 90 days

WASHINGTON (AFP) – The United States said Monday it will need to see "something concrete" from China in the next 90 days to build a real agreement on trade, two days after Donald Trump and Xi Jinping called a truce in the escalating confrontation between the two economic powerhouses.

Treasury Secretary Steven Mnuchin said on CNBC the US and China had held "very specific discussions" in Buenos Aires on Saturday evening on steps to defuse their conflict, which involves hundreds of billions in bilateral trade and had roiled world markets for months.

White House economic advisor Larry Kudlow said he expected the 25 percent punitive tariffs on US farm goods to be rolled back and urged China to take immediate steps to implement some of its commitments in order to give them "more credibility."

Mnuchin said for the first time there was "a clear path" to reduce the US trade deficit with China to zero.

"There was a significant commitment from both leaders on what needs to be done over the 90 days and instructions to both teams to negotiate and turn this into a real agreement with specific action items, deliverables and time frames," Mnuchin said.

Following the Trump-Xi talks, which took place over dinner at the end of the G20 summit, Washington agreed to hold off on Trump's threat to impose 25 percent tariffs on $200 billion worth of Chinese goods from December 1, leaving them at the current 10 percent rate.

In return, China is to purchase "very substantial" amounts of agricultural, energy, industrial and other products from the United States.

In a surprise announcement tweeted Sunday night, Trump also said China would "reduce and remove" tariffs of 40 percent on cars, though Beijing has yet to confirm the move.

Kudlow told reporters that while there was no agreement on the final level for tariffs on US autos "I expect those tariffs to go to zero."

And while he said the "history is not great" with China on trade, he was optimistic.

"We've never been close to this."

The US trade deficit with China was $335 billion last year and many manufacturers rely on inputs from the world's number two economy, so eliminating the deficit would be an extraordinary goal.

Trump's aggressive trade actions left in their wake a farm industry suffering from China's retaliation, hitting soybeans especially hard, and a business sector fraught with uncertainty, facing higher costs and holding off on investment.

But Mnuchin said, "I think there's no question the president's tariff strategy has worked. This is the first time they've responded on very, very specific issues."