WASHINGTON: US Treasury Secretary Steven Mnuchin confirmed on Sunday (May 20) that Washington and Beijing have agreed to back off from imposing tariffs on each…
WASHINGTON: US Treasury Secretary Steven Mnuchin confirmed on Sunday (May 20) that Washington and Beijing have agreed to back off from imposing tariffs on each other, a day after reaching an accord on slashing the American trade deficit with China.
„We have made very meaningful progress and we agreed on a framework,“ Mnuchin told Fox News on Sunday. „So right now we have agreed to put the tariffs on hold while we try to execute the framework.“
China’s Vice Premier Liu He, who led a high-level delegation to the United States this week, meantime confirmed that „the two sides reached a consensus, will not fight a trade war, and will stop increasing tariffs on each other,“ official Chinese news agency Xinhua reported.
The apparent detente between the two economic giants follows months of increasing tensions that have set markets on edge over fears of a damaging trade war.
The US-Chinese thaw raised concerns in some other countries still facing potential US tariffs, however, with France saying it could come „at the expense of Europe.“
Mnuchin emphasised on Sunday that the sides had also discussed structural changes by Beijing „to make sure that we have a fair ability to compete“ in its vast market.
‚UNFREEZING THE ICE‘
As each side worked to set expectations, Liu cautioned that „unfreezing the ice cannot be done in a day“ and that structural changes „will take time.“
Mnuchin added a caution of his own, emphasising that if China did not respect its commitments, Trump could „always decide to put the tariffs back on.“
In the absence of an agreement, US levies on US$50 billion of Chinese imports could have taken effect as early as next week.
