US to maintain tariffs on Chinese goods until Phase 2 deal; Phase 1 deal fully enforceable: Mnuchin

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Senate Democratic Leader Chuck Schumer on Tuesday said the 'Phase 1' trade agreement between the US and China is "remarkable for how little it achieves at an enormous price".
"These tariffs will stay in place until there is a Phase 2," said US Treasury Secretary Steven Mnuchin. PHOTO: AFP

WASHINGTON (REUTERS) - The United States will maintain tariffs on Chinese goods until the completion of a second phase of a United States-China trade agreement, US Treasury Secretary Steven Mnuchin said on Tuesday (Jan 14), a day before the two sides are to sign an interim deal.

He also said that the Phase One deal will be fully enforceable, including a pledge by China to refrain from manipulating its currency.

Mr Mnuchin told reporters that President Donald Trump could consider easing tariffs if the world's two largest economies move quickly to seal a follow-up agreement.

"If the president gets a Phase 2 in place quickly, he'll consider releasing tariffs as part of Phase 2," Mr Mnuchin said.

Mr Trump is slated to sign the Phase 1 trade agreement with Chinese Vice-Premier Liu He at the White House on Wednesday at 11.30am (12.30am on Thursday, Singapore time).

The signing occurs a week before the US Senate is due to begin its impeachment trial of the US president. Mr Trump became only the third US president to be impeached when the House last month approved charges that he abused his power by pressuring Ukraine to announce an investigation into Democratic presidential rival Joe Biden and obstructed Congress.

Mr Mnuchin told Fox Business Network that documents about the trade deal would be released on Wednesday.

China committed to purchase US$200 billion (S$270 billion) of additional US goods and services over the next two years under the agreement, he said, adding that US companies and farmers could reap further gains once structural reforms were tackled in a Phase Two agreement.

Concerns about the trade deal weighed on US stocks on Tuesday, sending shares lower after a Bloomberg report suggested US tariffs could remain in place until after the November presidential election.

New data showed that the costs of Mr Trump's trade wars were proving more widespread, deeper and longer-lasting to American manufacturing competitiveness and jobs than previously believed.

Mr Mnuchin and US Trade Representative Robert Lighthizer said earlier there was no agreement in place with China on further tariff reductions.

In a joint statement, they said all aspects of the Phase 1 trade deal with China would be made public on Wednesday, except a confidential annex that will detail US products and services to be purchased by China.

"There are no other oral or written agreements between the United States and China on these matters, and there is no agreement for future reduction in tariffs. Any rumours to the contrary are categorically false," they said.

After the Phase 1 deal was reached last month, Washington agreed to suspend tariffs on US$160 billion (S$215 billion) in Chinese-made cellphones, laptop computers and other goods that were due to take effect on Dec 15, and to halve existing tariffs on US$120 billion of other goods to 7.5 per cent. It kept in place 25 per cent tariffs on US$250 billion of other Chinese goods.

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