The Times Herald (Norristown, PA)
U.S., China putting trade war on hold
Mnuchin cites progress in talks
WASHINGTON » The world’s two biggest economies are pulling back from the brink of a trade war after making progress in talks aimed at bringing down America’s massive trade deficit with China.
“We are putting the trade war on hold,” U.S. Treasury Secretary Steven Mnuchin said on “Fox News Sunday.”
After high-level talks Thursday and Friday, Beijing agreed in a joint statement with the U.S. to “substantially reduce” America’s trade deficit with China — but didn’t commit to cut the gap by any specific amount. The Trump administration had sought to slash the deficit by $200 billion.
Still, Mnuchin said that the two countries had made “meaningful progress” and that the Trump administration has agreed to put on hold proposed tariffs on up to $150 billion in Chinese products. China had promised to retaliate in a move that threatened a tit-fortat trade war.
Mnuchin said they expect to see a big increase — 35 to 45 percent this year alone — in U.S. farm sales to China. He also forecast a doubling in sales of U.S. energy products to the Chinese market, increasing energy exports by $50 billion to $60 billion in the next three to five years.
Mnuchin said Commerce Secretary Wilbur Ross, who has been part of the U.S. negotiating team, would soon be traveling to China to follow up on last week’s discussions.
In Saturday’s statement, Beijing committed to “significantly increase” its purchases of American goods and services, saying the increase would “meet the growing consumption needs of the Chinese people and the need for high-quality economic development.”
Last year, the U.S. racked up a record $376 billion deficit with China in the trade of goods, largest by far with any nation.
Trade analysts were not surprised that China refused to agree to a numerical target for cutting the trade gap, but they said the talks likely were more successful in de-escalating trade tensions.
“The Trump administration seems eager to engineer at minimum a temporary peace with China to ensure a smooth runup to the Kim-Trump summit in June,” Cornell University economist Eswar Prasad said, referring to the June 12 meeting scheduled between President Donald Trump and North Korean leader Kim Jong Un.