21 May 2018Hot off the Press
The US-China trade war has been put “on hold” after the two economic powerhouses agreed to come up with a broader trade agreement, according to US Treasury Secretary Steven Mnuchin.
Mr Mnuchin and top White House economic advisor, Larry Kudlow, said the agreement set up a framework for negotiators to address trade imbalances.
“We are putting the trade war on hold. Right now, we have agreed to put the tariffs on hold while we try to execute the framework,” Mr Mnuchin told Fox News.
The breakthrough comes after the US threatened to impose up to $150 billion in tarrifs on Chinese goods, prompting China to threaten to impose tariffs on $50 billion of US exports including farming and chemical products.
A joint US-China statement on Saturday (local time) said “China will significantly increase purchases of United States goods and services,” however there was no specific sum given or when the sales would begin.
“We are immediately going to follow this up with [Commerce Secretary Wilbur] Ross going there with very hard commitments in agriculture, where we expect to see a very big increase — 35-40% increases — in agriculture this year alone,” Secretary Mnuchin said. “In energy, doubling the energy purchases. I think you could see $50 [billion], $60 billion a year of energy purchases over the next three to five years. And strategically, that’s very important for us and very important for them.”
The US trade deficit with China hit new highs last year at $US375 billion ($465 billion). Washington has demanded that China reduce the deficit by at least $US200 billion by 2020.
Mr Mnuchin declined to confirm whether Beijing had agreed to a $US200 billion deficit reduction, saying, “We have specific targets. I am not going to publicly disclose what they are. They go industry by industry.”