US China Trade War Temporarily At Ease
US China Trade War Temporarily At Ease: US has temporarily suspending tariffs on Chinese goods after an agreement was reached to reduce the bilateral trade deficit stated by US Treasury Secretary Steven Mnuchin.
A trade agreement between China and the United States including possible tariff reductions started to take shape during talks in Washington this week.
Representatives for the world’s two largest economies have set “targets” for a potential pact after two days of negotiations, but there is no guarantee it will get signed, said the person who declined to be named. The sides are talking about cutting tariffs in sectors including energy and farming, among others.
Trump has proposed tariffs on $50 billion worth of Chinese goods such as electronics and machinery in response to alleged intellectual property theft. He floated additional tariffs on $100 billion in other Chinese products.
China floated retaliatory measures on U.S. goods such as crops and aircraft. The possible Chinese tariffs sparked concerns about damage to the U.S. agricultural industry.
“We are putting the trade war on hold,” Mnuchin said on Sunday in a “Fox News Sunday” television interview. “Right now, we have agreed to put the tariffs on hold while we try to execute the framework.”
Earlier President Donald Trump had threatened to slap tariffs on as much as $150 billion worth of Chinese imports to force changes in China’s trade practices, to which Beijing responded by vowing to retaliate against US exports.
After two days of negotiations in Washington, the US and China on Saturday announced a framework agreement whereby Beijing agreed to “significantly” increase its purchases of US goods and services in an attempt to mitigate the risks of a trade war.
However, China failed to commit to a specific dollar figure despite Washington’s initial demand for a $200 billion reduction by 2020 in the trade deficit – which hit a record $375 billion last year.
Mnuchin downplayed that failure, saying that the two delegations had agreed on “specific targets” for individual sectors but adding that they would not be publicly disclosed.
Commerce Secretary Wilbur Ross will soon visit Beijing to finalize the agreement whereby China will import more energy products and agricultural commodities from the US, the treasury secretary said.
Some free-trade lawmakers and market watchers hope the talks will avoid escalating tariffs and a potential trade war.
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