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Serving: United States
Treasury Secretary Steven Mnuchin testifies during a House Appropriations Committee hearing Mark Wilson/GettyImages
Treasury Secretary Steven Mnuchin

Mnuchin says U.S.-China trade talks are 'productive'

Both sides trying to reach a deal to avert a tariff increase on Chinese goods on March 1.

by Bloomberg News

Treasury Secretary Steven Mnuchin sounded a positive note on Friday as U.S.-China trade talks drew to a close in Beijing, as both sides tried to reach a deal that would avert a tariff increase on Chinese goods by March 1.

“Productive meetings with China’s Vice Premier Liu He and @USTradeRep Amb. Lighthizer,” Mnuchin said in tweet, without giving further details. Mnuchin and U.S. Trade Representative Robert Lighthizer also planned to meet Chinese President Xi Jinping. It was unclear when or if a statement would be released.

The two sides remained far apart this week on structural reforms to China’s economy that the U.S. has requested, according to three U.S. and Chinese officials who asked not to be identified because the talks were private. They said it would likely take a meeting between Xi and President Donald Trump to seal a deal.

The U.S. and China were scrambling on Friday to produce a memorandum of understanding that would pave the way for a meeting between the two presidents, the Financial Times reported, citing people briefed on the negotiations.

“Just wait for a while and the answer will be revealed soon,” Chinese Foreign Ministry spokesman Geng Shuang told regular news briefing Friday in Beijing.

The U.S. has also not relented on demands for China to dial back government subsidies for state-owned enterprises and improve corporate governance, one of the people said, an extremely sensitive issue that is seen as a non-starter for Chinese leaders.

The uncertainty has weighed on investors, with Asian stocks retreating from the highest levels since October following a dip in U.S. equities. Both sides have an incentive to strike a deal: Trump has repeatedly linked market gains to his administration’s policies, while Bloomberg Economics estimates China would avoid a 0.3 percent drag on 2019 gross domestic product if the trade truce holds.

Trump earlier this week said he was open to delaying the deadline to more than double tariffs on $200 billion of Chinese goods if the two countries were close to a deal that addresses deep structural changes to China’s economic and trade policies. Bloomberg News reported late Wednesday that he’s considering pushing back the deadline by 60 days.

Asked Thursday if the Trump administration was considering extending the deadline for tariff increases, White House economic adviser Larry Kudlow said no decision has been made.

Negotiators in Beijing “are soldiering on” and the “vibe” is good, Kudlow said on Fox News, adding that he was briefed by U.S. officials earlier Thursday. “They are going to be meeting with President Xi tomorrow, which is a very good sign. They are moving through all of the issues. They are getting the job done.”

Kudlow later told reporters at the White House that he’s “cautiously optimistic” on the outcome of the talks with China.

A meeting date between Trump and Xi has not been set and it is unlikely the pair can meet before the March 1 deadline.

White House adviser Kellyanne Conway said on Tuesday that Trump wants to meet Xi “very soon.”

--With assistance from Jennifer Jacobs and Kevin Hamlin.

To contact Bloomberg News staff for this story: Haze Fan in Beijing at hfan40@bloomberg.net ;Saleha Mohsin in Washington at smohsin2@bloomberg.net

To contact the editors responsible for this story: Daniel Ten Kate at dtenkate@bloomberg.net ;Jeffrey Black at jblack25@bloomberg.net Karen Leigh

© 2019 Bloomberg L.P

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