US wants ‘concrete’ trade action from China within 90 days
White House urges Beijing to take 'immediate steps' on trade commitments
WASHINGTON: The US said on Monday it will need to see "something concrete" from China in the next 90 days to build a real agreement on trade, two days after Mr Donald Trump and Mr Xi Jinping called a truce in the escalating confrontation between the two economic powerhouses.
Treasury Secretary Steven Mnuchin said on CNBC that the US and China had held "very specific discussions" in Buenos Aires on Saturday evening on steps to defuse their conflict, which involves hundreds of billions in bilateral trade and had roiled world markets for months.
There was a significant commitment from both leaders on what needs to be done over the 90 days...US Treasury Secretary Steven Mnuchin
White House economic adviser Larry Kudlow said he expected the 25 per cent punitive tariffs on US farm goods to be rolled back and urged China to take immediate steps to implement some of its commitments in order to give them "more credibility" .
Mr Mnuchin said for the first time there was "a clear path" to reduce the US trade deficit with China to zero.
"There was a significant commitment from both leaders on what needs to be done over the 90 days and instructions to both teams to negotiate and turn this into a real agreement with specific action items, deliverables and time frames," he said.
Following the Trump-Xi talks, which took place over dinner at the end of the G-20 summit, Washington agreed to hold off on Mr Trump's threat to impose 25 per cent tariffs on US$200 billion (S$272 billion) worth of Chinese goods from Dec 1, leaving them at the current 10 per cent rate.
In return, China is to purchase "very substantial" amounts of agricultural, energy, industrial and other products from the US.
In a surprise announcement tweeted on Sunday night, Mr Trump also said China would "reduce and remove" tariffs of 40 per cent on cars, though Beijing has yet to confirm the move.
Mr Kudlow told reporters that while there was no agreement on the final level for tariffs on US autos, he expects " those tariffs to go to zero".
And while he said the "history is not great" with China on trade, he was optimistic. "We have never been close to this."
The US trade deficit with China was US$335 billion last year and many manufacturers rely on inputs from the world's No. 2 economy, so eliminating the deficit would be an extraordinary goal.
Mr Trump's aggressive trade actions left in their wake a farm industry suffering from China's retaliation, hitting soybeans especially hard, and a business sector fraught with uncertainty, facing higher costs and holding off on investment.
But Mr Mnuchin said: "There is no question the President's tariff strategy has worked. This is the first time they have responded on very, very specific issues."
China's retaliation against key US soybeans with a 25 per cent tariff has caused exports to drop almost to zero in August and September compared to those months last year.
"My expectation is that China will roll back those tariffs quickly," Mr Kudlow said.
Financial markets surged on early Monday celebrating news of the ceasefire, and though by the end of the day, the benchmark Dow Jones Industrial Average had given back some gains, it still closed up nearly 300 points.
However, analysts were much more cautious, saying it seemed unlikely a deal could be reached on such a rapid timeline and pointing to discrepancies in the claims of victory from Washington and Beijing.- AFP