China, US hold trade talks ahead of January negotiations

US Treasury Secretary Steven Mnuchin (centre), with Treasury chief of staff Eli Miller (left) and spokesman Tony Sayegh, at Tuesday's interview with Bloomberg. Mr Mnuchin said that while reducing the trade deficit with China is a major priority, the
US Treasury Secretary Steven Mnuchin (centre), with Treasury chief of staff Eli Miller (left) and spokesman Tony Sayegh, at Tuesday's interview with Bloomberg. Mr Mnuchin said that while reducing the trade deficit with China is a major priority, the Trump administration understands that it would take time.PHOTO: BLOOMBERG

US Treasury chief says he, Trump unaware of Huawei arrest when they were at G-20 meet

WASHINGTON/BEIJING • The Uni-ted States and China have held several rounds of talks in recent weeks and both sides plan to hold a formal, face-to-face meeting next month to negotiate a broader truce in their trade wars, said US Treasury Secretary Steven Mnuchin.

"We're in the process of confirming the logistics of several meetings and we're determined to make sure that we use the time wisely, to try to resolve this," Mr Mnuchin said in an interview with Bloomberg on Tuesday. Previously, the administration had not been specific on the timing of talks.

Both sides are now focused on trying "to document an agreement" by a March 1 deadline for their current tariffs truce to run out, he added.

Yesterday, China's commerce ministry said that both countries have held a telephone call about trade and economic issues.

The call was at a "vice-ministerial level", the ministry said in a one-line statement, without providing any other details.

During the interview with Bloomberg in Washington, Mr Mnuchin was asked about the arrest of Ms Meng Wanzhou, the chief financial officer of Huawei Technologies. He said neither he nor President Donald Trump were aware of the arrest when they met Chinese President Xi Jinping for dinner on Dec 1, the same day that Ms Meng was arrested in Canada.

Mr Mnuchin also sought to play down the President's declaration last week that he would be willing to intervene on Huawei's behalf if it was necessary to help reach a trade deal between the world's two largest economies.

 

"We've been very clear and China understands that these are separate tracks," Mr Mnuchin said.

He and Mr Trump had not had "any direct conversations'' about the Huawei case, Mr Mnuchin said.

He also declined to comment on whether the Treasury Department was preparing a broader case against the Chinese telecommunications-equipment provider, which has been accused by the United States of conspiring to violate US sanctions against Iran.

Hawks in the Trump administration have long raised questions about just how much the US should trust any promises of economic reforms made by Mr Xi, given the experience of past administrations in dealing with Beijing.

But Mr Mnuchin said the two sides had agreed that any eventual deal would be "enforceable and verifiable and have specific dates on it".

"We are determined that if we have an agreement it will be specific enough that time frames and details and everything else will be laid out," he said.

Reducing the trade deficit with China remained a major priority for Mr Trump but Mr Mnuchin said the administration understood that it would take time and was also focused on securing structural changes in the Chinese economy that would help balance trade.

The US' monthly trade deficit in goods with China hit a record in October and is on track to have expanded through the first two years of the Trump presidency.

"I don't think that we'd expect that overnight," Mr Mnuchin said of the prospect of eliminating the trade deficit with China. But he said the US and China had agreed on the need for more balanced trade and that would set the stage for meaningful change.

The US was determined to secure the same market access for American companies to China that Chinese companies get to the US, Mr Mnuchin said. "And if we do that and there are structural changes, the trade deficit by definition will be a lot more balanced," he added.

"I don't think there is a question of there is a win for them, or a win for us," Mr Mnuchin said. "I think that there could be a win for both in the sense of they have a large, growing middle class that wants US goods. So I think there's an economic outcome that's good for both of us."

Mr Trump has agreed to put on hold a scheduled increase from 10 per cent to 25 per cent in tariffs on some US$200 billion (S$274 million) in imports from China while the negotiations take place through March 1.

In return, China has agreed to resume buying American soya beans and to at least temporarily lower retaliatory tariffs on US car exports imposed last summer.

Uncertainty about the substance of the truce agreed to over a dinner between Mr Trump and Mr Xi on the sidelines of the Group of 20 summit in Buenos Aires, Argentina, has fed volatility in financial markets in recent weeks. So too have growing concerns about a slowdown in the Chinese economy.

BLOOMBERG, REUTERS

A version of this article appeared in the print edition of The Straits Times on December 20, 2018, with the headline 'China, US hold trade talks ahead of January negotiations'. Print Edition | Subscribe