Mnuchin and Yi Gang, chairman of the People’s Bank of China, are to hold routine talks on various issues and then break away for their discussion on trade. Yi, he noted, has participated in now-stalled talks between Washington and Beijing over the trade and technology dispute between the two largest economies.
“This will be a one-on-one with Gov. Yi to talk alone about the trade issues,” Mnuchin told reporters in the Japanese city of Fukuoka. But he added, “I would expect the main progress will be at the G-20 meetings of the presidents.”
He said there were no plans for trade talks in Washington or Beijing before Presidents Donald Trump and Xi Jinping are to meet in Osaka for the G-20 summit June 28-29.
The Trump administration began slapping tariffs on imports of Chinese goods nearly a year ago, accusing Beijing of using predatory means to lend Chinese companies an edge in advanced technologies such as artificial intelligence, robotics and electric vehicles. Those tactics, the U.S. contends, include hacking into U.S. companies’ computers to steal trade secrets, forcing foreign companies to hand over sensitive technology in exchange for access to the Chinese market and unfairly subsidizing Chinese tech firms.
Trump has also complained repeatedly about America’s huge trade deficit with China, a record $379 billion last year.
The United States now is imposing 25% taxes on $250 billion in Chinese goods. Beijing has counterpunched by targeting $110 billion worth of American products, focusing on farm goods such as soybeans in a deliberate effort to inflict pain on Trump supporters in the U.S. heartland.
The U.S. side has been preparing to expand retaliatory tariff hikes of 25% on another $300 billion of Chinese products, and Mnuchin indicated it was prepared to take that step if negotiations with Beijing fail. But he said Trump had not yet made a decision on that, suggesting room for further delays depending on the outcome of his discussion with Xi later this month.
Asked if other financial leaders attending the meetings in Fukuoka were raising the issue, Mnuchin said no. But he acknowledged the slowdown in Europe, China and other regions.
“I’m hearing concerns if we continue on this path there could be issues. There will be winners and losers,” he said.
Mnuchin and other officials in the Trump administration assert that the winners from the tariffs standoff, including the United States, will benefit from investments by companies moving their operations out of China to avoid the tariffs.
Countries were welcoming news that after a flurry of negotiations, Trump said he would refrain from imposing 5% tariffs on products from Mexico after it “agreed to take strong measures” to stem the flow of Central American migrants into the United States.
The tariffs that had been scheduled for Monday were “indefinitely suspended” after the two sides signed an agreement, he said in a tweet.
“It’s a good thing,” Japan’s central bank governor, Haruhiko Kuroda, told reporters.
On the agenda: taxes and crime
The agenda for the G-20 talks in Fukuoka on Saturday were mainly concerned with reforms of tax policies, combatting money laundering and cybercrimes, and innovations in financial technologies.
Japan is hosting the G-20 for the first time since it was founded in 1999.