Muslim Times(Web Desk) – US Treasury Secretary Steven Mnuchin says negotiations with Chinese officials have been successful and as a result a trade war with China is “on hold.”
“We’re putting the trade war on hold,” Mnuchin said on “Fox News Sunday,” but also threatened that Trump “could always decide to put the tariffs back on if China doesn’t go through with their commitments.”
Mnuchin said that the two sides agreed on a framework for reducing the US trade deficit with China and protecting US technology during high-level talks between the two sides on Thursday and Friday, although more meetings are required to finish the deal.
“Right now we have agreed to put the tariffs on hold while we try to execute the framework.”
In another sign of easing tensions between the two sides, after the two-day high-level talks in Washington, China’s official Xinhua news agency quoted China’s State Council Vice Premier Liu He saying: “The two sides reached a consensus, will not fight a trade war, and will stop increasing tariffs on each other.”
And in a joint statement China further added that “to meet the growing consumption needs of the Chinese people and the need for high-quality economic development, China will significantly increase purchases of United States goods and services.”
Some Trump supporters have indicated their disappointment with the agreements with China and are asking whether Washington has blinked in its confrontation with Beijing. “Not good enough. Time to take the gloves off,” former steel executive Dan DiMicco tweeted Saturday.
Last month, the US and China announced a series of tariffs that if implemented could have triggered a full-blown trade war. The Trump administration announced 25-percent tariffs on more than a thousand Chinese products.
The Chinese responded swiftly with proposals for the same tariffs on 106 American products including soybeans, cars and chemical products.
The prospect of a trade war between the world’s two biggest economies has sent shivers through financial markets in recent weeks and raised fears that the confrontation could provoke a damaging trade war, so investors will be relieved that a breakthrough has been reached.
But Tai Hui, JP Morgan’s chief market strategist for Asia Pacific, warned that this is unlikely to be the end of tension between the two countries, the Guardian reported.
“Historical precedents suggest the US could re-engage with China on trade issues if it sees China dragging its feet on fulfilling its pledges. Moreover, the last three months have further exposed Washington’s concerns over China’s advancement in technology and its threat as a competitor, both commercially and strategically,” said Hui.
“It’s like a back pain that never goes away. It was a shock in the first instance it happened, but then life goes on as the most acute symptoms are addressed. The good news is that markets should learn to live with it and consider its impact more rationally.”