Treasury Secretary Steven Mnuchin said the Trump administration is putting its trade war with China “on hold” after two days of talks in Washington that he said had produced agreement on increased Chinese purchases of American products and measures to make it easier for U.S. companies to operate in China.
President Trump had threatened to impose tariffs on $150 billion in Chinese imports unless China made widespread changes in industrial policies that he said required U.S. companies to surrender technology secrets to do business in China. Mnuchin said the two sides have agreed on a “framework” to avoid the sanctions that requires China to lower tariffs on unspecified American goods, protect U.S. technology and buy more made-in-the-USA items.
“Right now we have agreed to put the tariffs on hold while we try to execute the framework,” Mnuchin said on “Fox News Sunday.”
Commerce Secretary Wilbur Ross will be dispatched to Beijing “immediately” to work out the details of accelerated Chinese purchases, said Mnuchin, who led the U.S. delegation in the talks with a Chinese team headed by Vice Premier Liu He.
The treasury secretary, a former Goldman Sachs banker, would not comment on reports that China had balked at agreeing to a U.S. request for $200 billion in increased annual purchases, a figure that many economists regard as impossible to execute. Instead, he said the two sides had agreed on specific targets for individual sectors, such as agriculture and energy.
“We expect to see a very big increase, 35 to 45 percent increases in agriculture this year alone,” Mnuchin said. “In energy, doubling the energy purchases. I think you could see $50 billion to $60 billion a year of energy purchases over the next three to five years.”
Other administration officials have suggested that China might buy enormous quantities of liquefied natural gas, though there are questions about the volumes that the limited U.S. export infrastructure could handle.
Mnuchin’s remarks came one day after the United States and China released a joint statement that appeared to take a step back from a potential trade war. Larry Kudlow, director of the National Economic Council, said Friday that China had agreed to buy “at least $200 billion” more from the United States each year. On Sunday, Kudlow appeared to back away from that claim, saying on ABC News’s “This Week” that “there’s no agreement for a deal. We never anticipated one. There’s a communique between the two great countries. That’s all.
Some Trump supporters already are questioning whether the administration has blinked in its confrontation with China. “Not good enough. Time to take the gloves off,” former steel executive Dan DiMicco tweeted Saturday.
Mnuchin said the president “can always decide to put the tariffs back on if China doesn’t go through with their commitments.”
Amid concerns that Trump was also preparing to soften the punishment for a major Chinese telecom company that had illegally traded with Iran and North Korea, Mnuchin said the administration “didn’t agree to any quid pro quo.”
Chinese President Xi Jinping asked his American counterpart to “look into” a Commerce Department enforcement action against ZTE that threatened to put the company out of business. After ZTE violated the terms of a 2017 settlement of criminal and civil charges, the department slapped a seven-year ban on U.S. suppliers doing business with the company. Last week, after Trump directed the Commerce Department in a tweet to help the company return to normal operations, lawmakers from both parties objected. The Republican-controlled House Appropriations Committee amended a must-pass annual spending bill to bar the department from lifting the penalties.
“I can assure you that the president wants us to be very tough on ZTE, and all he did was ask the secretary to look into this,” Mnuchin said.
Mnuchin also suggested that Trump was prepared to wait until 2019 to wrap up negotiations aimed at a new North American trade deal. He confirmed that the United States, Mexico and Canada remain “far apart” after nine months of talks, having missed House Speaker Paul D. Ryan’s deadline last week to have a deal on which lawmakers could vote this year.
“The president is more determined to have a good deal than he is worried about any deadline,” the treasury secretary said.