US-China trade deal 90% done, says Mnuchin ahead of G-20 talks

(Left) United States President Donald Trump and Chinese President Xi Jinping (right) will meet on Saturday at the Group of 20 summit in Japan.
(Left) United States President Donald Trump and Chinese President Xi Jinping (right) will meet on Saturday at the Group of 20 summit in Japan.

WASHINGTON • US Treasury Secretary Steven Mnuchin said yesterday the trade deal between the United States and China is "about 90 per cent" complete.

"We were about 90 per cent of the way there (with a deal) and I think there's a path to complete this," Mr Mnuchin said in an interview with CNBC news channel.

US President Donald Trump and Chinese President Xi Jinping will meet this week at the Group of 20 (G-20) summit in Japan, hoping to calm their 11-month trade war.

Earlier, it was reported that the US is willing to suspend the next round of tariffs on an additional US$300 billion (S$406 billion) of Chinese imports while Beijing and Washington prepare to resume trade negotiations, said people familiar with the plans. The decision, which is still under consideration, may be announced after the meeting between Mr Trump and Mr Xi, set for Saturday at the summit.

A broad outline of the Trump-Xi agenda was discussed in a phone call on Monday between US Trade Representative Robert Lighthizer, and his counterpart in Beijing, Vice-Premier Liu He.

People familiar with the American read-out of the conversation characterised the call as productive. They said both sides discussed how they can present the resumption of trade talks to their domestic audiences as a win.

The Trump administration has said the goal of the meeting is to create a path forward for a trade agreement, after negotiations broke down last month.

 
 
 
 

Although each side still wants to secure significant concessions from the other, both agreed to dial down the tit-for-tat responses and aim for a truce that could soothe financial markets while their sides resume negotiations, people familiar with the situation said.

But yesterday, Mr Trump warned again in an interview with Fox Business that substantial additional tariffs would be placed on Chinese goods if there is no progress on the trade deal after his meeting with Mr Xi at the G-20 summit.

The talks between the leaders of the world's two largest economies mark a critical juncture in their nearly year-old trade war, and both sides have plenty to lose if it escalates.

Mr Trump is riding a strong economy and booming stock market into his re-election campaign.

China's economy has been slowing, and the US tariffs are encouraging some foreign companies to shift production elsewhere.

People familiar with the talks say some advisers are pushing Mr Trump to avoid setting a hard deadline, to avoid a situation similar to when the two leaders met last December and agreed to a 90-day tariff pause. Mr Lighthizer and other advisers, at that point, said it was a fixed tariff-suspension period to allow time for more talks, but the deadline was repeatedly extended.

When those negotiations broke down last month, Mr Trump followed through on his threat to raise tariffs on US$200 billion of Chinese goods.

 
A version of this article appeared in the print edition of The Straits Times on June 27, 2019, with the headline 'Trade deal 90% done, says Mnuchin ahead of G-20 talks'. Print Edition | Subscribe