US-China tar­iff dis­pute not a threat to world econ­omy: Mnuchin

Gulf Times Business - - BUSINESS -

US Trea­sury Sec­re­tary Steven Mnuchin pushed back yes­ter­day against warn­ings that Wash­ing­ton’s trade fight with China im­per­ils the world econ­omy, say­ing that push­ing Bei­jing to open up will be good for all.

The IMF has warned this week at an­nual meet­ings in Bali that the es­ca­lat­ing US-China trade con­fronta­tion would hob­ble global eco­nomic growth, as the fund low­ered its fore­casts for this year and next.

But Mnuchin told re­porters on the In­done­sian re­sort is­land that Pres­i­dent Don­ald Trump’s drive to pun­ish China with tar­iffs to en­cour­age it to adopt fairer trade prac­tices would have the op­po­site af­fect. “Our ob­jec­tive with China is very clear: it’s to have a more bal­anced trad­ing re­la­tion­ship,” Mnuchin said. “I think that if we are suc­cess­ful, this is very good for US com­pa­nies, US work­ers, Euro­peans, Ja­pan, all of our other al­lies, and good for China.”

Mnuchin said, how­ever that the IMF’s warn­ings were “all the more rea­son for China to be in­cented to ad­dress these is­sues with us”. The IMF Tues­day cut its out­look for global GDP growth by 0.2 per­cent­age points to 3.7% for 2018 and 2019, say­ing that “every­one is go­ing to suf­fer” from a clash be­tween the world’s two big­gest economies. Ten­sions have soared in re­cent months with Don­ald Trump’s ad­min­is­tra­tion rolling out bil­lions of dol­lars in tar­iffs against China in a bid to tackle its trade deficit and rein in what Wash­ing­ton views as un­ac­cept­able trade prac­tices by the Asian gi­ant.

“Our ob­jec­tive is to in­crease ex­ports and have a more bal­anced, fair re­la­tion­ship where our com­pa­nies can do busi­ness there on terms that are sim­i­lar to how they can do busi­ness (in the US),” Mnuchin said.

“(A) free fair and re­cip­ro­cal re­la­tion­ship.” At­ten­tion has be­gun to turn to­ward hopes that Trump and Chi­nese Pres­i­dent Xi Jin­ping could meet on the side­lines of the G20 sum­mit next month in Ar­gentina and bury the hatchet with some sort of agree­ment.

“I don’t think any de­ci­sion has been made in re­gards to a meet­ing,” Mnuchin said. “To the ex­tent that we can make progress to­ward a meet­ing, I would en­cour­age that and that’s some­thing we are hav­ing dis­cus­sions about.

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