US-China trade war deal ‘90 per cent complete’, US Treasury chief says
- Steven Mnuchin says this week’s meeting of the leaders of the world’s two biggest economies will be ‘very important’
- Chinese president calls a meeting of the Communist Party’s inner circle in preparation for talks with Donald Trump
A trade deal between China and the United States is “90 per cent completed”, US Treasury Secretary Steven Mnuchin has said just three days before a high-stakes meeting between the countries’ two top leaders.
In an interview with CNBC on Wednesday, Mnuchin said this week’s Group of 20 summit in Osaka, Japan, where Chinese President Xi Jinping and his US counterpart Donald Trump are expected to meet, would be “a very important G20”.
“We were about 90 per cent of the way there [to a trade deal] and I think there’s a path to complete this,” he said, without specifying the remaining 10 per cent.
“The message we want to hear is that they want to come back to the table and continue because I think there is a good outcome for their economy and the US economy to get balanced trade and to continue to build on this relationship.”
The upbeat assessment is the most positive comment from a senior official directly involved in talks to end a costly trade war between the world’s two largest economies since negotiations broke down early last month.
Also on Wednesday, Bloomberg cited sources saying the US was considering suspending its next round of tariffs on another US$300 billion of Chinese goods. Beijing has insisted that it will not agree to any deal under the threat of tariffs.
But China has largely remained tight-lipped. Before going to Japan, Xi called a meeting on Monday with the other 24 members of the Politburo, the Communist Party’s inner circle.
Other than a terse and heavily scripted report afterwards, there was little information about what the cadres discussed but official media offered some clues.
Immediately after the meeting, Xi arranged a special study session for the Politburo on “remembering the mission and conducting self-revolution”, according to party journal Qiushi.
“Self-revolution” is a term often used to refer to the need to overcome petty local interests for the greater good of the party.
Xi warned against “lurking risks” everywhere that could subvert the party’s mission, and stressed the importance of unity around party leadership.
He also called on the senior officials to learn lessons from previous crises in the party.
“Why has our party been able to survive bloodbath after bloodbath, and achieve victory after victory?” Xi said. “It’s because we resolutely marched towards the goal of national rejuvenation and won firm support from the people.”
While these reports made no direct mention of the US, they can be seen as a coded call for other top party leaders to rally behind Xi and give him political support ahead of tense talks with Trump.
The Monday meeting was technically the only opportunity for Xi to gather all top officials – many posted outside Beijing – to discuss key issues and forge consensus.
The South China Morning Post reported earlier that during the previous Politburo meeting in May, Xi canvassed the other Politburo members for their views on the latest US demands. The group had decided to reject some of the demands from Washington that were deemed as challenging the party’s rule in China, leading to the collapse of the trade talks.
For Xi to strike a new deal with Trump on Saturday, he would need the backing of his Politburo colleagues.
Zhu Lijia, a public policy expert at the state-run Chinese Academy of Governance, said the meeting would have inevitably touched on the Osaka summit.
“The study session was mostly preparing lower officials on how to carry on the campaign,” Zhu said. “They surely would have exchanged views on major international issues including the trade war for the G20 meeting.”
On Monday, Wang Shouwen, China’s vice-minister of commerce and a top deputy in the negotiation team, laid out China’s position ahead of the talks between the two leaders, suggesting that Beijing should not be the only side to make concessions to resolve the conflict.
“We should meet each other halfway, which means that both sides will need to compromise and make concessions, and not just one side,” Wang said.
Xi and Trump have agreed to meet on Saturday to discuss a solution to end the costly trade war that has embroiled the two countries for almost a year. Both countries have levelled billions in tariffs against each other, in a conflict that has expanded to technology, with the US blacklisting Chinese telecoms giant Huawei and five Chinese supercomputing companies.
Chinese Vice-Premier Liu He, who has led Beijing’s negotiating team, spoke by phone on Monday with Mnuchin and US Trade Representative Robert Lighthizer, with the two sides agreeing to resume talks.
Trump and Xi also spoke by phone last week, when the two discussed the need to maintain further communication.
The trade talks between the world’s two biggest economies collapsed in May, with the Trump administration accusing the Chinese side of backtracking on key legal commitments on issues such as market access, intellectual property protection, and forced technology transfers. The Chinese side accused the US of repeatedly changing their demands.
Mnuchin, who has been a key American negotiator along with Lighthizer, also said on Wednesday that Xi and Trump had a “very close working relationship” but there needed to be “the right efforts in place” for a final deal.
He said a deal could be a “win-win scenario” for both countries, adding that China and the US share interests in the denuclearisation of North Korea and further cooperation was expected on that front.