Mnuchin

Washington: In an interview to Fox News, US Treasury Secretary Steven Mnuchin said that the Trump administration is not afraid of a trade war with China.

Last week, Trump initiated a series of actions against unfair trade practices of China, including taking steps to impose additional tariffs on a number of Chinese items amounting to $60 billion.

Chinese State media had said yesterday that the US and China’s top economic officials agreed by phone today to “continue to communicate” on trade issues.

Mnuchin agreed today that he had very productive conversations with the vice premier. He came to Washington. We’ve communicated several times since then. We continue to have a discussion the other night.

We’re working on a pathway to see if we can reach an agreement as to what fair trade is for them to open up their markets, reduce their tariffs, stop forced technology transfer. These are all the things we want to do. But in a negotiation, you have to be prepared to take action. And that’s what President Trump is doing, Mnuchin said.

What we’re doing is long-term very good for the economy, which it is pressing for free and fair trade. And to the extent that China is willing to open up their markets, which they’re making all the right directions on. But if they open up their markets, it’s an enormous opportunity for US companies, Mnuchin said.

In a retaliatory but mild move, China had warned the United States that it was “not afraid of a trade war” as it threatened tariffs on $3 billion worth of US goods in retaliation.

Global stocks have plummeted as fears rise that the confrontation could provoke a damaging trade war.

Washington this week said it would temporarily exempt Europe as well as countries including Brazil, Argentina, South Korea and Australia from the steep new steel and aluminium tariffs that Trump unveiled this month and which took effect yesterday.

European and US trade officials said this week they were beginning talks to reach a compromise.

But Beijing has also unveiled a hit list of products that could face duties of up to 25%, from fresh fruit to pork and wine, though it stopped short of pulling the trigger as it indicated its readiness to negotiate an agreement.

China’s commerce ministry warned that a 15% tariff on 120 goods worth almost $1 billion — including fresh fruit, nuts and wine — would be imposed if the US fails to reach a “trade compensation agreement” within an unspecified time frame.

In a second step, a 25% tariff would be imposed on eight goods totalling nearly $2 billion, including pork and aluminium scrap, after “further evaluating the impact of the US measures on China,” the statement said.

The United States had a record $375.2 billion goods trade deficit with China last year.