Talk on trade with China's central bank chief constructive: Mnuchin

People's Bank of China governor Yi Gang with US Treasury Secretary Steven Mnuchin at a meeting of Group of 20 finance ministers and central bankers in Fukuoka on Saturday. Mr Mnuchin tweeted that they had a candid and constructive discussion.
People's Bank of China governor Yi Gang with US Treasury Secretary Steven Mnuchin at a meeting of Group of 20 finance ministers and central bankers in Fukuoka on Saturday. Mr Mnuchin tweeted that they had a candid and constructive discussion.PHOTO: BLOOMBERG

FUKUOKA (Japan) • United States Treasury Secretary Steven Mnuchin tweeted yesterday that he had a "candid" and "constructive" talk on trade issues with People's Bank of China governor Yi Gang.

Mr Mnuchin had earlier played down expectations for the meeting with Mr Yi, which took place on the sidelines of a gathering of Group of 20 (G-20) finance ministers and central bankers in Fukuoka, Japan.

He had foreshadowed that no big announcement was expected and that the main progress would occur at a meeting between presidents Donald Trump and Xi Jinping at the G-20 leaders' summit in Osaka at the end of the month.

Trade negotiations have been on hold since the US ramped up tariffs on Chinese imports last month, prompting a retaliatory move from China, after a breakdown in talks.

During a briefing on Saturday in Fukuoka, Mr Mnuchin said: "If they want to come back to the table and have a real agreement, we will negotiate. If not, we will go forward with our plan (to impose more tariffs)."

Asked on Saturday about China's currency, he attributed its recent decline to market forces and the absence of intervention. "When you have intervention in a market for a long period of time and then they don't intervene, the market could view that as a desire to have the currency weaken," Mr Mnuchin said.

The Treasury Department issued its semi-annual foreign-exchange report to Congress last month. No country was named a manipulator in the report. China remains on its watch list.

 
 

Mr Mnuchin has said that the trade talks broke down because Beijing reneged on provisions of a tentative deal. Mr Trump raised tariffs on about US$200 billion (S$272 billion) in Chinese imports to 25 per cent in response.

China has blamed the US for the breakdown and vowed to reciprocate in various ways. Mr Trump has said he will decide whether to enact tariffs on another US$325 billion in Chinese imports after the G-20 leaders' summit in Osaka.

In another key bilateral meeting with Mr Mnuchin, Japanese Finance Minister Taro Aso said yesterday that he did not raise the issue of whether to include a currency provision in a two-way trade deal with the US.

Mr Mnuchin has said in the past that in future trade deals, including one with Japan, Washington would like to include a provision to deter currency manipulation.

Tokyo has resisted the idea for fear of having its hands tied on measures to address an unwelcome yen spike that would hurt Japan's export-reliant economy.

BLOOMBERG, REUTERS

A version of this article appeared in the print edition of The Straits Times on June 10, 2019, with the headline 'Talk on trade with China's central bank chief constructive: Mnuchin'. Print Edition | Subscribe