US and China trade negotiators will sit down together in January: US Treasury Secretary Steven Mnuchin

  • Formal discussions still in the planning stage
  • The two sides have held several phone conversations in recent weeks
PUBLISHED : Wednesday, 19 December, 2018, 1:19pm
UPDATED : Wednesday, 19 December, 2018, 1:19pm

Negotiators charged with hammering out a broader truce in the US-China trade war are unlikely to meet until January, according to US Treasury Secretary Steven Mnuchin.

Mnuchin said on Tuesday that the two sides had held several phone conversations in recent weeks and were still in the process of planning further formal discussions.

“We’re in the process of confirming the logistics of several meetings and we’re determined to make sure that we use the time wisely, to try to resolve this,” Mnuchin said.

Both sides were now focused on trying “to document an agreement” by March 1, when the 90-day truce in the trade war ends.

Mnuchin said the US expected there would be meetings in January. Previously the administration had not been specific on the timing of talks.

Chinese officials with knowledge of the discussions also said the two sides were planning to meet in January. They asked not to be named as the talks were private, while China’s Ministry of Commerce did not respond to a request for comment.

Mnuchin said neither he nor President Donald Trump were aware of the arrest of a senior executive from Huawei Technologies when they met with China’s Xi Jinping for dinner on December 1, the same day the company’s chief financial officer Sabrina Meng Wanzhou was arrested in Canada.

The treasury secretary also sought to play down the president’s declaration last week that he would be willing to intervene on Huawei’s behalf if it was necessary to help reach a trade deal between the world’s two largest economies.

“We’ve been very clear and China understands that these are separate tracks,’’ Mnuchin said.

Top Chinese and US envoys discuss next step in trade war talks

He and the president had not had “any direct conversations’’ about the Huawei case, Mnuchin said. He also declined to comment on whether the US Treasury was preparing a broader case against the Chinese telecommunications equipment provider, which has been accused by the US of conspiring to violate sanctions against Iran.

Hawks in the Trump administration have long raised questions about just how much the US should trust any promises of economic reforms made by Xi, given the experience of past administrations in dealing with Beijing.

But Mnuchin said the two sides had agreed that any eventual deal would be “enforceable and verifiable and have specific dates on it.”

“We are determined that if we have an agreement it will be specific enough that time frames and details and everything else will be laid out,’’ he said.

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Reducing the trade deficit with China remained a major priority for Trump but Mnuchin said the administration understood it would take time and was also focused on securing structural changes in the Chinese economy that would help balance trade.

The US monthly trade deficit in goods with China hit a record in October and is on track to have expanded through the first two years of the Trump presidency.

“I don’t think that we’d expect that overnight,’’ Mnuchin said of the prospect of eliminating the trade deficit with China. But he said the US and China had agreed on the need for more balanced trade and that would set the stage for meaningful change.

Mnuchin said the US was determined to secure the same market access for American companies to China that Chinese companies get to the US.

“And if we do that and there are structural changes, the trade deficit by definition will be a lot more balanced,’’ he said.

“I don’t think there is a question of there is a win for them, or a win for us,” Mnuchin said.

“I think that there could be a win for both in the sense of they have a large, growing middle class that wants US goods. So I think there’s an economic outcome that’s good for both of us.’’

Trump has agreed to put on hold a scheduled increase from 10 per cent to 25 per cent in tariffs on some US$200 billion in imports from China while the negotiations take place up to the March 1 deadline.

In return China has agreed to resume buying American soybeans and to at least temporarily lower retaliatory tariffs on US car exports imposed last summer.

Uncertainty about the substance of the truce agreed to over the dinner between Trump and Xi on the G20 sidelines has fed volatility in financial markets in recent weeks. So, too, have growing concerns about a slowdown in the Chinese economy.