U.S. Treasury secretary plans China visit as trade war clouds world economy
(Adds comments from Freeland, Pelosi aide, updates markets)
* U.S. Treasury chief says talks with Beijing are continuing
* Says U.S. near to resolving tariff row with Canada, Mexico
* No. 2 House Democrat criticizes Trump trade policy
By David Lawder and Susan Heavey
WASHINGTON, May 15 (Reuters) - U.S. Treasury Secretary
Steven Mnuchin said on Wednesday he will likely travel to China
soon to continue talks as Washington and Beijing seek to resolve
a trade war that has cast a pall over the global economy and
Mnuchin did not elaborate on the timing of future
negotiations but characterized two days of high-level talks with
Chinese officials in Washington last week as constructive.
"My expectation is that we will go to Beijing at some point
in the near future to continue those discussions," he said in a
U.S. Senate Appropriations subcommittee hearing. "We're
continuing discussions. There's still a lot of work to do."
Mnuchin's remarks dovetailed with a cooling of the Trump
administration's rhetoric toward China after another round of
tit-for-tat tariffs between the world's two largest economies
and a selloff on global stock markets.
On Tuesday, U.S. President Donald Trump denied the talks
with China had collapsed and sounded an optimistic note about
the chance of a deal to end the trade war, saying he had an
"extraordinary" relationship with Chinese President Xi Jinping.
Trump, who plans to meet Xi at a G20 summit in Japan next
month, also urged China to buy more U.S. farm products.
U.S. agricultural goods, including soybeans, have been
targeted by China's retaliatory tariffs, and American farmers, a
key political constituency for Trump, are frustrated with the
failure of the two sides to find a solution to the dispute.
The U.S. Department of Agriculture has paid out $8.52
billion directly to farmers as part of a 2018 aid program
designed to offset losses from trade tariffs by China and other
trading partners, a spokesman for the agency said on Wednesday.
The Trump administration had pledged up to $12 billion in
aid to help offset losses for crops hit by Chinese tariffs.
Amid complaints from trading partners in Europe and North
America, who see the United States as having embraced a
"carrot-and-stick" strategy that has been thin on carrots, the
Trump administration may be signaling a softer approach.
In the hearing on Wednesday, Mnuchin said the United States
is close to resolving a dispute over steel and aluminum tariffs
that were imposed on Canada and Mexico last year as the three
countries renegotiated the North American Free Trade Agreement.
U.S. Trade Representative Robert Lighthizer met with
Canadian Foreign Minister Chrystia Freeland in Washington on
Wednesday to discuss those tariffs, which have aggravated Ottawa
and Mexico City, and other issues related to the U.S.-Mexico
Canada Agreement (USMCA), the replacement for NAFTA.
The three countries have not yet ratified the new deal.
Freeland told reporters she had discussed the "Section 232"
tariffs on Canada with Lighthizer but declined to say whether
the two countries were close to a deal.
"We made the case as we have been doing for some time that
the best outcome for both Canadians and Americans would be to
lift those tariffs and to have free trade between our two
countries who have this fantastic trading relationship in
place," Freeland said.
U.S. House of Representatives Speaker Nancy Pelosi said she
had a "productive meeting" with Lighthizer that was almost
entirely focused on the USMCA deal, one of her aides said.
Trump also is expected to delay a decision on slapping
tariffs on imported cars and parts by up to six months, three
U.S. administration officials told Reuters. A formal
announcement is expected by Saturday, the officials
The tariffs of up to 25 percent on cars and parts could have
a devastating impact on Japan and countries in the European
Union, particularly Germany.
Global stock markets, which have swooned in the past week on
the back of rising trade tensions, were trading mostly higher,
with major U.S. indexes adding to gains from
Trump, who has embraced protectionism as part of an "America
First" agenda and railed against what he describes as China's
unfair trade practices, has not ruled out imposing punitive
levies on all of China's imports to the United States.
As negotiations toward resolving the U.S.-China trade war
stalled last week, the United States raised the pressure by
increasing tariffs to 25% from 10% on a previous, $200 billion
list of Chinese imports.
China retaliated on Monday with higher tariffs on a revised
list of $60 billion worth of U.S. products
Trump could launch 25% tariffs on another $300 billion worth
of Chinese goods when he meets Xi next month.
China is vowing not to succumb to such pressure.
A further escalation of the trade war could disrupt global
supply lines and damage a slowing world economy.
China on Wednesday reported surprisingly weaker growth in
its retail sales and industrial output in April.
Data out of the United States showed U.S. retail sales fell
last month as households cut back on purchases of motor vehicles
and other goods, pointing to a slowdown in economic growth after
a boost from exports and inventories in the first quarter. Other
data showed a drop in U.S. industrial production in
There is unease in the U.S. Congress about the potential
fallout of tariffs on the broader American economy.
U.S. House Majority Leader Steny Hoyer said U.S. consumers
were in the "same boat as farmers" and would end up having to
bear the burden of the tariffs. Consumer spending accounts for
more than two-thirds of U.S. economic activity.
"What we ought to do is have a rational trade policy that
doesn't have adverse consequences (rather) than have to fill the
hole economically through additional payments," Hoyer, the No. 2
Democrat in the House, told reporters.
(Reporting by David Lawder, Susan Heavey, Humeyra Pamuk, Amanda
Becker, Alex Alper and David Shepardson in Washington;
Additional reporting by David Ljunggren in Ottawa; Writing by
Editing by Susan Thomas and Cynthia Osterman)
First Published: 2019-05-15 19:58:00
Updated 2019-05-15 21:07:08
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