Mnuchin expresses optimism trade standoffs can be resolved

China's economy grew a forecast-beating 6.8 percent in the first quarter, official data showed on April 17, overcoming Beijing's battle on financial risk and pollution and trade tensions with the US. (AFP)
Updated 22 April 2018
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Mnuchin expresses optimism trade standoffs can be resolved

  • “We are cautiously optimistic,” US treasury secretary says of trade talks with Chinese counterparts
  • China's commerce ministry welcomes prospect of US visit to discuss trade issues

The International Monetary Fund and the World Bank repeatedly warned at their meetings this week that intensifying trade tensions could jeopardize a healthy global economic expansion.
But US Treasury Secretary Steven Mnuchin expressed cautious optimism Saturday that countries could settle their differences without a trade war.
Mnuchin met during the past three days with financial officials from China, Japan and Europe over a series of punitive tariffs unveiled by the Trump administration against China and other trading partners.
In a session with reporters, Mnuchin refused to say how close the United States was to resolving the various trade disputes, but he did say progress had been made.
The United States and China are on the brink of what would be the biggest trade dispute since World War II. Each has proposed imposing tariffs of $50 billion on each other’s products; President Donald Trump is looking to impose tariffs up to $100 billion more on Chinese goods.
In a speech earlier this month, Chinese President Xi Jinping vowed to open China’s market wider to foreign companies, raising hopes the dispute with Washington could be resolved. Mnuchin said he discussed Xi’s proposals with Chinese officials. “We are cautiously optimistic,” Mnuchin told reporters, saying that he may soon travel to Beijing for further talks.

 

The Commerce Ministry in Beijing said Sunday that China welcomes a visit from the US to Beijing to discuss trade issues and confirms it has “received information” regarding Washington’s interest in such a trip.
Trade tensions dominated the three days of talks among top finance officials attending meetings of the Group of 20 major economies, the 189-nation International Monetary Fund and its sister lending agency, the World Bank.
The officials roundly criticized Trump’s get-tough approach to trade, a reversal of seven decades of US support for increasing freedom in global commerce. In his speech to the IMF’s policy committee Saturday, Yi Gang, the head of China’s central bank, said that global growth could be hurt by “an escalation of trade frictions caused by unilateral actions,” an obvious reference to America’s threatened tariffs against China.
Mnuchin insisted that the United States was not trying to provoke a global trade war but seeking to protect American jobs from unfair competition. “The president has been very clear on what our objectives are,” Mnuchin said. “We are looking for reciprocal treatment. This is not about protectionism.”
There were signs of conciliation. The US dropped its objection to the first increase in the World Bank’s capital resources since 2010, clearing the way for the bank’s board to OK a $13 billion increase in its capacity to make loans to poor countries. The move was tied to a package of reforms the US had sought.
Both the World Bank and IMF held meetings of their policy committees on Saturday. In a closing communique, the IMF expressed concern that the rising trade tensions could dim what at the moment are bright prospects for the global economy, which is expected to grow this year at the fastest pace since 2011.
“Trade tensions are not to the benefit of anyone,” said Lesetja Kganyago, who leads the policymaking committee and is governor of the South African Reserve Bank. “If there is a trade conflict, there could never be winners. We could all only be losers.”
On Friday, Mnuchin had called on the IMF to do more to police countries running large trade surpluses, a role that has traditionally been left to the Geneva-based World Trade Organization. The final IMF communique did state: “We will work together to reduce excessive global imbalances in a way that supports global growth.” The communique did not spell out how this would be accomplished.

FASTFACTS

$50 billion

The proposed level if tariffs by China and the US on each other's products.


Japan, EU to sign widespread trade deal eliminating tariffs

Updated 2 min 17 sec ago
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Japan, EU to sign widespread trade deal eliminating tariffs

  • Both sides are heralding the deal, which covers a third of the global economy and more than 600 million people
  • Besides the latest deal with the EU, Japan is working on other trade agreements, including a far-reaching trans-Pacific deal

TOKYO: The European Union and Japan are signing a widespread trade deal Tuesday that will eliminate nearly all tariffs, seemingly defying the worries about trade tensions set off by President Donald Trump’s policies.
The signing in Tokyo for the deal, largely reached late last year, is ceremonial. It was delayed from earlier this month because Japanese Prime Minister Shinzo Abe canceled going to Brussels over a disaster in southwestern Japan, caused by extremely heavy rainfall. More than 200 people died from flooding and landslides.
European Council President Donald Tusk and European Commission President Jean-Claude Juncker, who arrived Monday, will also attend a gala dinner at the prime minister’s official residence.
Both sides are heralding the deal, which covers a third of the global economy and more than 600 million people.
The deal eliminates about 99 percent of the tariffs on Japanese goods to the EU, but remaining at around 94 percent for European imports into Japan for now and rising to 99 percent over the years. The difference is due to exceptions such as rice, a product that’s culturally and politically sensitive and has been protected for decades in Japan.
The major step toward liberalizing trade was discussed in talks since 2013 but is striking in the timing of the signing, as China and the US are embroiled in trade conflicts.
The US is proposing 10 percent tariffs on a $200 billion list of Chinese goods. That follows an earlier move by Washington to impose 25 percent tariffs on $34 billion of Chinese goods. Beijing has responded by imposing identical penalties on a similar amount of American imports.
Besides the latest deal with the EU, Japan is working on other trade agreements, including a far-reaching trans-Pacific deal. The partnership includes Australia, Mexico, Vietnam and other nations, although the US has withdrawn.
Japan praised the deal with the EU as coming from Abe’s “Abenomics” policies, designed to wrest the economy out of stagnation despite a shrinking population and cautious spending. Japan’s growth continues to be heavily dependent on exports.
By strengthening ties with the EU, Japan hopes to vitalize mutual direct investment, fight other global trends toward protectionism and enhance the stature of Japanese brands, the foreign ministry said in a statement.
The EU said the trade liberalization will lead to the region’s export growth in chemicals, clothing, cosmetics and beer to Japan, leading to job security for Europe. Japanese will get cheaper cheese, such as Parmesan, gouda and cheddar, as well as chocolate and biscuits.
Japanese consumers have historically coveted European products, and a drop in prices is likely to boost spending.