US at least a month away from enacting tariffs on another US$300b of Chinese goods: Mnuchin

US Treasury Secretary Steven Mnuchin told reporters that US officials were not currently scheduled to go to Beijing for the next round of negotiations.
US Treasury Secretary Steven Mnuchin told reporters that US officials were not currently scheduled to go to Beijing for the next round of negotiations.PHOTO: REUTERS

BEIJING/WASHINGTON (REUTERS) - The United States is studying how proposed tariff increases on roughly another US$300 billion (S$414 billion) in Chinese imports will affect consumers and is at least a month away from enacting them, US Treasury Secretary Steven Mnuchin said on Wednesday (May 22).

Washington earlier this month hiked existing tariffs on US$200 billion in Chinese goods, prompting Beijing to retaliate, as talks to end a 10-month trade war between the world's two largest economies stalled.

US President Donald Trump, who has embraced protectionism as part of an "America First" agenda aimed at rebalancing global trade, has threatened to slap tariffs of up to 25 per cent on an additional listing of Chinese imports worth about US$300 billion.

"There won't be any decision probably for another 30 to 45 days," Mr Mnuchin said at a hearing with US lawmakers, adding that he had spoken with Walmart Inc's chief financial officer about how the tariffs will impact consumer prices.

A 30-day window would represent an accelerated schedule compared to previous rounds of US tariffs and would mean that the next batch of levies would be ready when Mr Trump meets Chinese President Xi Jinping, as expected, at a Group of 20 leaders summit in Japan on June 28 and 29.

“I’m still hopeful we can get back to the table. The two presidents will likely see each other at the end of June,” Mr Mnuchin said, adding that the impact of tariffs on American consumers was a key consideration in the US trade strategy.

Walmart Inc, the world’s largest retailer, has said its prices will rise because of higher tariffs on Chinese goods.

 
 

"That's something I can assure you the President will be focused on before we make any decisions," Mr Mnuchin told the US House of Representatives Financial Services Committee.

 

Mr Mnuchin told reporters earlier that US officials were not currently scheduled to go to Beijing for the next round of negotiations, CNBC reported.

He has said the Trump administration is open to holding new talks with China if the two sides can proceed on the basis of previous negotiations.

No talks between top Chinese and US negotiators have been scheduled since the last round ended on May 10, the same day Mr Trump increased tariffs on US$200 billion worth of Chinese goods to 25 per cent from 10 per cent.

The seeds of the current stalemate were sowed earlier this month when negotiations between the US and China stalled as Chinese officials sought major changes to the text of a proposed deal that the Trump administration says had been largely agreed.

The Chinese government's top diplomat Wang Yi said on Wednesday that China's door would always be open to further trade talks with the US, but added that Beijing would not accept any unequal agreements.

The acrimony between the two countries intensified since last week, when Washington put Chinese telecom equipment company Huawei Technologies Co on a blacklist that curbs Huawei's access to US-made components.

The move is a potentially devastating blow for the company that has rattled technology supply chains and investors.

Some mobile operators, including the Ymobile unit of Japan's Softbank Corp and rival KDDI Corp, put launch plans for Huawei's new P30 Lite smartphone on hold on Wednesday.

Another big Chinese tech firm, video surveillance equipment-maker Hikvision Digital Technology Co, may also face limits on its ability to buy US technology, the New York Times reported, citing people familiar with the matter, sending the firm's Shenzhen-listed shares down 5.54 per cent.

Global equity markets, which slumped last week on the rising US-China tensions, slid as investors sought safety in bonds, the Japanese yen and Swiss franc.

STRIDENT TONE

While China has not said whether or how it may retaliate to the measures against Huawei, state media have taken an increasingly strident and nationalistic tone and said Beijing will not bend to US pressure.

China must prepare for difficult times as the international situation is increasingly complex, President Xi said in comments carried by state media on Wednesday.

 
 

During a three-day trip this week to the southern province of Jiangxi, a cradle of China's communist revolution, Mr Xi urged people to learn the lessons of the hardships of the past.

 

"Today, on the new Long March, we must overcome various major risks and challenges from home and abroad," state news agency Xinhua paraphrased Mr Xi as saying, referring to the 1934-36 trek of Communist Party members fleeing a civil war to a remote rural base, from where they re-grouped and eventually took power in 1949.

"Our country is still in a period of important strategic opportunities for development, but the international situation is increasingly complicated," he said. "We must be conscious of the long-term and complex nature of various unfavourable factors at home and abroad, and appropriately prepare for various difficult situations."

The report did not elaborate on those difficulties, and did not directly mention the trade war or the US.

RETALIATION

US firms said in a survey released on Wednesday that they were facing retaliation in China over the trade war.

The American Chamber of Commerce of China and its sister body in Shanghai, said members reported facing increased obstacles such as government inspections, slower customs clearances and slower approval for licensing and other applications.

It also said 40.7 per cent of respondents were considering or had relocated manufacturing facilities outside China.

 
 

Of the almost 250 respondents to the survey, which was conducted after China and the US both raised tariffs this month, almost three-quarters said the levies were hurting their competitiveness.

Long considered a solid cornerstone in a relationship fraught with geopolitical frictions, the US business community has in recent years advocated a harder line on what it sees as discriminatory Chinese trade policies.

The US is seeking sweeping changes to trade and economic policies, including an end to forced technology transfers and theft of US trade secrets.

Washington also wants curbs on subsidies for Chinese state-owned enterprises and increased access for US firms in Chinese markets.

China for years has blocked major US tech firms, including Google and Facebook, from fully operating in its market.

Those and other restrictions have fuelled calls from within the US business community for Washington to pursue more reciprocal policies.