US treasury secretary confirms what Trump suggested: trade talks with China are on the back burner

Steven Mnuchin tells CNBC that Washington’s priorities are now negotiating new deals with Mexico, Canada and Europe

PUBLISHED : Wednesday, 29 August, 2018, 5:29am
UPDATED : Wednesday, 29 August, 2018, 6:48am

US Treasury Secretary Steven Mnuchin said on Tuesday that progress in the US-China trade talks was not likely until trade issues with Europe and America’s two closest neighbours are resolved.

“We’ve put [Washington’s foreign trade objectives] in three categories: the first was really [the North American Free Trade Agreement, or Nafta]; the second is dealing with the EU, which we are making progress on; and the third is China,” Mnuchin said in an interview with CNBC.

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Mnuchin made the comments a day after US President Donald Trump said that now was “not the right time to talk” to China, and that the US and Mexico had reached an agreement to revise Nafta, the three-nation pact that also includes Canada.

Referring to talks between US and Chinese officials last week in Washington that made no advances, Mnuchin said intellectual property protection and market access “are not issues that are going to be resolved in any one or two meetings. But if they’re serious about the types of commitments they were talking about, then it’s a move in the right direction”.

He added: “It can’t just be talk, it has to be follow-through as well. They have to open their markets. As [Trump] said, it’s not just about buying more soybeans, but we’re happy for them to buy more soybeans. This is about structural changes that create fair market access.”

Mnuchin said he was hopeful a revamped trade deal would be reached soon with Canada – but if not, Washington would forge ahead with the one it has negotiated with Mexico.

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Progress toward repairing trade ties with allies comes as Washington’s efforts to get trade talks with Beijing back on track have foundered. Many members of Trump’s own Republican Party have criticised the president’s multi-front trade conflicts for making it difficult to assemble a united front against Beijing.

Senate Republicans, including John Cornyn of Texas and Chuck Grassley of Iowa, have questioned Trump’s decision to withdraw from the Trans-Pacific Partnership, which also includes Mexico and Canada.

In his remarks on Tuesday, Mnuchin appeared to endorse an approach to the trade war with Beijing that includes cooperation with traditional US allies.

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“We need better market access to China, we need reciprocal trade, and these are issues that our allies in the G-7 agree with us on,” the treasury secretary said.