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.
