Treasury Secretary Steven Mnuchin said Monday the U.S. and China have a “conceptual” agreement on enforcement concerns, emphasizing positive progress already made in trade talks, which are set to resume at high levels next month.
“I think the enforcement area we at least have a conceptual, an agreement on,” Mnuchin told Fox Business Network.
He also had a warning: President Donald Trump has no problem keeping heavy tariffs on Beijing if a deal can’t be reached.
The two economic superpowers have slapped tariffs on hundreds of billions of dollars’ worth of each other’s goods since 2018, as the U.S. pressured China over trade deficits, alleged intellectual property theft and forced tech transfers, among other issues.
The two sides appeared on the cusp of a deal earlier this year. Mnuchin said in April that talks were in “the final laps.” But negotiations fell apart in early May, leading to a tense summer and further escalation in the tariff fight.
An additional 15% tax on Chinese imports was applied to about $112 billion worth of goods on Sept. 1, with another round currently set to take effect in mid-December. China has retaliated with its own tariffs on U.S. imports.
Talks at the “vice-minister level” will take place this month, Mnuchin said, followed by talks in Washington with Vice Premier Liu He in early October. After his appearance on Fox Business, Mnuchin told reporters at the White House that Yi Gang, governor of the People’s Bank of China, will also participate in the October talks.
“They’re coming here. I take that as a sign of good faith that they want to continue to negotiate, and we’re prepared to negotiate,” Mnuchin told Fox.
The Treasury secretary painted a rosy picture of the American position in the trade war, a regular source of stress and uncertainty for investors and blamed for contributing to a slowdown in the economy.
He said the Trump administration has “not yet seen any impact on the U.S. economy” linked to the trade war, and predicted a “very robust finish of the year” with “no signs of recession” on the horizon.
While there “have been certain situations where there have been difficulties for companies,” Mnuchin said that U.S. Trade Representative Robert Lighthizer “has done a very good job managing the exception process on a case-by-case basis.”
But the trade war has already measurably affected some U.S. industries, agriculture being among the most visible. The Wall Street Journal reported last month that Chinese imports of U.S. farm goods were cut in half between 2017 and 2018 as the tariffs made those more pricey. China’s targeting of farmers, a constituency that broadly broke for Trump in the 2016 presidential election, spurred the White House to authorize billions of dollars in agricultural subsidies.
And the president’s words and deeds on trade, the economy and international relations have caused enough anxiety in markets for J.P. Morgan to launch a new “Volfefe Index,” designed to track how Trump’s tweets affect volatility in U.S. interest rates.