“The Chinese side has received information that the U. S. side hopes to come to Beijing to discuss economic and trade issues. China welcomes this.”
Following a barrage of warnings that protectionism could unleash stagflation in the US economy, with the latest Beige Book mentioning the word “tariff” no less than 36 times in the context of higher prices and slower growth, the US Treasury appears eager to ease back on the growing trade war with China, and overnight Treasury Secretary Steven Mnuchin said he is considering a trip to China amid a growing trade dispute that could affect as much as $150 billion in bilateral trade with Beijing, and which central bankers warn could derail a global economic upswing (and also provide them with a perfect excuse to delay tightening).
Speaking on Saturday in Washington at the IMF’s spring meetings Mnuchin said he’s “cautiously optimistic” of reaching an agreement with China that bridges their differences over trade, and added that a trip to China “is under consideration.” Still, any possibility of a quick truce remains remote as Mnuchin admitted: “I’m not going to make a comment on timing, nor do I have anything confirmed.”
On Sunday, China’s Commerce Ministry responded that it is aware of and welcomed plans by top U. S. officials to visit the country to discuss trade and economic issues.
“The Chinese side has received information that the U. S. side hopes to come to Beijing to discuss economic and trade issues. China welcomes this, ” a short statement on the commerce ministry’s website said.
As Bloomberg adds, a visit by the U. S. Treasury secretary to China could signal a breakthrough in the spat between the world’s two-biggest economies, whose threats to slap tariffs on each other have rattled markets and raised fears of a trade war. It would also come at a sensitive time for the region’s geopolitics, with negotiations under way on a planned meeting between President Donald Trump and North Korean leader Kim Jong-Un.
The unexpected olive branch also comes just days after the IMF warned that “rising financial vulnerabilities, increasing trade and geopolitical tensions, and historically high global debt threaten global growth prospects.”
Separately, Mnuchin said he met with new PBOC governor, Yi Gang, at the IMF gathering this week. The discussions focused on issues related to the Chinese central bank, not trade, said the secretary. Mnuchin said they also discussed China’s planned further opening of some markets, a move that U. S. has encouraged and “appreciated.”
Mnuchin also said he met with Russian Finance Minister Anton Siluanov during the IMF meeting, at Russia’s request. Moscow sought “clarification” on U. S. sanctions, Mnuchin said, without elaborating. “These are very important tools. We will continue to look at the use of sanctions in all different areas,” he said. Quoted by Bloomberg, Siluanov on Friday said he views sanctions as “an instrument of protectionism” and condemned any measures taken against his country.
