FUKUOKA (REUTERS) - US Treasury Secretary Steven Mnuchin said on Saturday (June 8) he would discuss trade issues with People's Bank of China Governor Yi Gang, but said the main progress in the US-China trade dispute would take place later this month at a meeting between President Donald Trump and Chinese President Xi Jinping.
Mr Mnuchin told reporters on the sidelines of the G-20 finance leaders meeting in Japan that the Trump-Xi meeting was the "next important meeting" in the trade dispute.
The Treasury chief likened the meeting, unconfirmed by China, to a Trump-Xi meeting last December in Buenos Aires, which paved the way for five months of negotiations to try to resolve the issue.
Mr Mnuchin said he did not have specific goals for his discussions on Sunday with Mr Yi, a key member of China's trade negotiating team.
He said the two finance leaders would discuss economic and finance issues as part of their normal G20 interactions and also discuss trade issues, but no announcement was expected.
"This is not a negotiating meeting," Mr Mnuchin said.
Mr Mnuchin said the United States and China were about 90 per cent of the way towards reaching "an historic agreement" before China backtracked on certain commitments.
He said that if China wants to resume the negotiations on the basis of the texts prior to an early May breakdown of talks, the US side is ready to engage.
"If we can get the right agreement, that's great. If we can't get the right agreement, we will proceed with tariffs," Mr Mnuchin said.
The Trump administration is taking steps to impose 25 per cent tariffs on the remaining US$300 billion worth of Chinese imports so far untouched by the trade war between the world's two largest economies.
These tariffs could be ready for activation around the end of June, when the Osaka G-20 summit take place.
Mr Mnuchin said that the United States wants free, fair and balanced trade with China, in part to close a gaping US trade deficit with China.
"If we can't have that, the end result will be that my expectation is that many companies will move their production out of China to other locations," due to tariffs, Mr Mnuchin said.