The US President Donald Trump emerged victorious after Washington and Mexico agreed on measures to stem the flow of Central American migrants into the United States. US President Trump called off his plans to impose a 5% tax on Mexican exports, said the Secretary of Treasury Steven Mnuchin, speaking to reporters on Saturday in Fukuoka on the sidelines of a meeting with financial leaders of the G20 economies, urging China to follow suit and resume the stalled negotiations.
Mnuchin said he planned to have a private conversation with Yi Gang, the head of China's central bank. In a G-20 group meeting later in the day, the two were seen exchanging friendly remarks, however, there were no fresh signs of Beijing's willingness to compromise in the dispute over trade and technology.
"From our perspective of where we are now, it is a result of them backtracking on significant commitments," Mnuchin said.
"I don't think it's a breakdown in trust or good or bad faith. If they want to come back and complete the deal on the terms we were negotiating, that would be great." Mnuchin added that he had no direct message to give to Yi, who has participated in the 11 rounds of discussions so far on resolving the dispute between the world's two largest economies over technology and trade.
Mnuchin said there were no plans for trade talks with Washington or Beijing before Trump and Xi Jinping, whose meeting is due to happen in Osaka during the G-20 summit on June 28 and 29.
"This will be a one-on-one with Governor Yi to talk alone about the trade issues, but I would expect the main progress will be at the G-20 meetings of the presidents," Mnuchin said.
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 US contends, include hacking into US 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. In addition to that, America's huge trade deficit with China, which reached a record of $379 billion last year, is one of the major factors driving Trump's frustrations with Beijing.
The US is currently imposing 25% taxes on $250 billion on Chinese goods. Beijing has countered America's move by targeting $110 billion worth of American products, focusing on farm goods such as soybeans in an effort to inflict pain on Trump supporters in the US heartland. The US 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.
"As the President has said, if we can get the right agreement, that's great. If we can't, we will proceed with tariffs," he said.
The deal with Mexico helps alleviate uncertainty over the deal Washington recently reached on revising the North American Free Trade Agreement.
The new US-Mexico-Canada deal has also been heading towards a vote in the Congress and might have been stymied by new tariffs. However, the US is still negotiating new trade deals with Japan after withdrawing from a Pacific Rim-agreement and the Obama proposed Trans-Pacific Partnership.
(With PTI inputs)