The Trump administration
won’t impose tariffs on Chinese products for now, after the two nations made
progress on trade issues during two days of talks, Treasury Secretary Steven
“We’re putting the trade war
on hold. So right now, we have agreed to put the tariffs on hold while we try
to execute the framework,” Mnuchin said on “Fox News Sunday.”
President Donald Trump has
threatened to impose tariffs on as much as $150 billion in Chinese imports to
punish Beijing for allegedly violating American intellectual property and
unfair trade practices. China vowed to retaliate with tariffs on everything
from soybeans to airplanes.
Mnuchin’s remarks will be a
relief to investors, who had feared the world’s two biggest economies were on
the brink of an all-out trade conflict. The International Monetary Fund has
warned that a global trade war would undermine the broadest global upswing in
Asian stocks were set to
start the week higher and S&P 500 contracts gained 0.7 percent, an
unusually large gain for early Asian trading.
Even so, Mnuchin said Trump
“can always decide to put the tariffs back on if China doesn’t go through with
their commitments.” Other members of the administration said duties are still
an option if needed to get China to chance its practices.
“As this process continues,
the United States may use all of its legal tools to protect our technology
through tariffs, investment restrictions and export regulations,” U.S. Trade
Representative Robert Lighthizer said in a statement. “Real structural change
is necessary. Nothing less than the future of tens of millions of American jobs
is at stake.”
Asked on CBS’s “Face the
Nation” Sunday whether Trump has taken the threat of tariffs off the table,
Larry Kudlow, the president’s top economic adviser, said, “I don’t think we’re
at that stage yet.”
“Tariffs are part of any
negotiation, and tariffs maybe have to be part of any enforcement,” Kudlow
said. “You cannot do this kind of major change without using everything that’s
in your quiver.”
It’s also not clear how long
any truce will last. Trump has often switched his position on trade issues. He
has frequently declared that talks on a new North American Free Trade Agreement
are going well, for example, only to threaten again to withdraw from the pact.
Mnuchin’s comments came
after the two nations on Saturday released a joint statement in
which China proposed to “significantly increase purchases” of U.S. goods.
The statement released by
the White House didn’t place a dollar figure on the increased purchases by
China, or address a comment on Friday by Kudlow suggesting that Beijing had
agreed to slash its annual trade surplus with the U.S. by $200 billion. The
U.S. had a $376 billion trade deficit in goods with China last year. The
shortfall was $337 billion when services are added.
Kudlow on Sunday downplayed
the significance of the $200 billion figure, saying on CBS that “maybe I got
ahead of the curve” and during a separate interview on ABC’s “This Week” that
“both sides have used that as a rough ballpark estimate.”
Vice Premier Liu He, a
special envoy of China’s President Xi Jinping, told reporters in Washington
that talks with Mnuchin, Secretary of Commerce Wilbur Ross and Lighthizer ended
with a pledge not to engage in a trade war, according to a Xinhua news agency report.
“We made very meaningful
progress and we agreed on a framework. The framework includes their agreement
to substantially reduce the trade deficit by increasing their purchases of
goods,” Mnuchin said. He said the two sides have agreed to numerical targets
but he didn’t want to disclose them.
The Chinese are offering to
make structural reforms such as lowering tariffs and other import barriers that
will allow the U.S. to export “billions and billions” of additional goods to
China, Kudlow said on ABC.
“We made a lot of progress
here in Washington and built on what happened in China,” Kudlow said. “The
president is in a very positive mood about this. I myself am very encouraged.”
The joint statement between
the two nations said both sides agreed on “meaningful increases” in U.S.
agriculture and energy exports and that the U.S. will send a team to China to
work out the details. Kudlow said Ross is going to the Asian nation and will be
“looking into a number of areas where we’re going to have greatly, significant
increases,” including energy, agriculture and manufacturing.
Even so, U.S. lawmakers will
probably have pointed questions about what the administration has agreed to
give up in exchange for a truce with China. In a major reversal, Trump
instructed his administration last week to come up with a penalty against
Chinese telecom-equipment maker ZTE Corp. that allows the company to stay in
business. The Commerce Department had banned ZTE from receiving imports from
its U.S. suppliers, a move that crippled ZTE.
The administration would
face a “real backlash” if it offers concessions to ZTE as part of the trade
talks, Republican Senator Lindsey Graham told Fox News.
Kudlow said on ABC that
while there may be “perhaps some small changes around the edges” in U.S. action
on ZTE, there will still be big fines and other remedies and “do not expect ZTE
to get off scot-free. It ain’t gonna happen.”
During the trade talks, the
delegations discussed expanding trade in manufactured goods, and each side
agreed to strengthen cooperation on intellectual property. China will “advance
relevant amendments” to its laws and and
regulations in that area, including its patent law, the White House said.