US warns tariffs may rise in December without final China trade deal

Declaration illustrates fragility of current ‘love fest’

Steven Mnuchin, the US treasury secretaryomberg, had warned China over tariffs.

Steven Mnuchin, the US treasury secretaryomberg, had warned China over tariffs.

 

Steven Mnuchin, the US treasury secretary, has warned that a new round of tariffs set for December 15th on $156 billion (€141 million) of Chinese goods would be triggered if Beijing failed to seal the limited deal tentatively struck with Donald Trump last week.

Mr Mnuchin’s warning in an interview with CNBC on Monday highlighted the fragility of the truce reached on Friday in the US-China trade war, despite Mr Trump’s declaration that a “love fest” was suddenly at hand between the world’s two largest economies.

While Mr Trump hailed the settlement reached on Friday after Liu He, China’s vice-premier, spent two days in Washington negotiating with top US officials, Chinese officials have been more cautious about the outcome, merely pointing to progress between the countries.

The limited deal outlined on Friday involves the US holding off on a tariff increase from 25 per cent to 30 per cent on $250 billion of Chinese goods, which was due to take effect on Tuesday.

Exchange

In exchange, China agreed to boost agricultural purchases and make some limited concessions on access to its financial markets and curbs on intellectual property theft. But there was no joint statement or text.

Mr Trump said it would take up to five weeks to complete the “phase one” deal, roughly in time for him to meet Xi Jinping, at the Apec summit in Chile in mid-November. Although the US never took the December 15th tariff increase off the table, Mr Mnuchin’s explicit warning raises the stakes for remainder of the negotiations.

“I have every expectation if there’s not a deal those tariffs will go in place, but I expect we’ll have a deal,” Mr Mnuchin said.

The deal was limited because it failed to address many of the biggest sticking points in US-China economic relations that are at the root of the trade war, such as industrial subsidies and cybertheft. – Copyright The Financial Times Limited 2019