Sanctions, tough trade terms do work: Mnuchin

US aims to create level playing field for its companies and workers, Treasury chief says

The United States wants to "change the discussion on trade", Treasury Secretary Steve Mnuchin said as he gears up for a two-day trip to China.

Crediting tough economic sanctions for bringing North Korea to the negotiating table, he said that if US President Donald Trump does not re-certify the Iran nuclear deal on May 12, similar tough sanctions against Teheran - lifted under the 2015 deal - will be reinstated.

In China, "we are looking to have a very frank discussion", Mr Mnuchin said at the Milken Global conference on Monday.

"We are looking at creating a level playing field for US companies and US workers. We are also very concerned about forced transfers of technology, about forced joint ventures; these are all the issues we will be discussing."

Mr Mnuchin is scheduled to visit Beijing tomorrow with top Trump administration officials including Commerce Secretary Wilbur Ross, US Trade Representative Robert Lighthizer, economic policy adviser Larry Kudlow, and White House trade adviser Peter Navarro.

"The good news is that over the last year President Trump and President Xi Jinping have developed a very close relationship," the Treasury chief said.

"From the first meeting at Mar-a-Lago, President Trump was very clear that the major issue was the trade imbalance, that we wanted to have reciprocal trade, that our markets are open for China for investments, for trade, (but) their markets are closed."

This is the same approach that Washington is taking with other trade partners.

"What we are trying to do with Nafta, with the European Union, with China, is more about free and fair balanced trade," Mr Mnuchin said. Nafta refers to the North American Free Trade Agreement, which the US is renegotiating with Canada and Mexico.

His comments came just hours before Mr Trump decided to postpone until June 1 his decision on whether to impose steel and aluminium tariffs on the EU, Canada and Mexico.

Mr Trump, in a Tweet yesterday, referred to Mr Mnuchin's trip to China.

"Delegation heading to China to begin talks on the Massive Trade Deficit that has been created with our Country. Very much like North Korea, this should have been fixed years ago, not now. Same with other countries and NAFTA... but it will all get done. Great Potential for USA!"

Mr Mnuchin also gave credit to allies and China for enforcing sanctions on North Korea.

"These economic sanctions really do work, China was very helpful working with us on this. There's no question in my mind that the reason why he (North Korean leader Kim Jong Un) is willing to negotiate is the sanctions."

Following last week's inter-Korea summit, which he called "historical", there are "high expectations" for the coming Trump-Kim summit, he said. "We will not take off sanctions until we are convinced and can verify that he (Kim) will give up his nuclear weapons."

In the case of Iran, if Mr Trump does not re-certify the nuclear deal known as the Joint Comprehensive Plan of Action - which is widely expected - sweeping secondary sanctions will go back into place, Mr Mnuchin said.

"That means European banks, anybody who is transacting in dollars, cannot do business with the designated companies," he said.

A version of this article appeared in the print edition of The Straits Times on May 02, 2018, with the headline 'Sanctions, tough trade terms do work: Mnuchin'. Print Edition | Subscribe