Treasury Secretary Steven Mnuchin will head to China next week in an attempt to settle trade disputes and thaw tensions with the Asian country after the Trump administration levied steep tariffs on China over its steel and aluminum exports to the U.S., The Wall Street Journal reports.
During a meeting with French President Emmanuel Macron at the White House, Trump stressed his tough stance on reducing the U.S. trade deficit with China. If Beijing and Washington fail to reach a deal, American tariffs would take effect after a May 15 public hearing.
In the month of January, the International Monetary Fund said that the economic growth of China would top 6.6 percent in the year 2018, but it now could drop by as much as 0.5 percent if these tariffs are imposed, and it could slow down even further if a global trade war actually heats up. "The president has been very clear on what our objectives are", Mnuchin said. The report, however, noted that a "full-blown trade war" - where there is an exchange of tariff or non-tariff barriers that causes significant economic pain to both sides - will be averted, for "both economic as well as political reasons". Meanwhile, ongoing economic reforms in the United States are necessitating that global trade rules be altered significantly.
Mnuchin also declined to say what he wants from a trade deal with China, adding, "If we have a deal, you'll know what it looks like when we have it". They came here recently, and we're going there.
If a real United States trade war ensues, then the economic growth prospects of China could negatively be impacted in a significant way.
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China responded "quickly but proportionately" the report said with a list of tariffs of equivalent value on imports from the U.S. including soybeans, vehicles and aircraft.
Mnuchin is understood to have already met with China's new central bank governor, Yi Gang, during the weekend's meetings to discuss giving global competitors easier access to Chinese markets.
Mnuchin indicated he's involved in a "dialogue" with the Chinese government to resolve the trade dispute. "A lot of these issues are not unique to the United States".
Trump has vowed to cut the USA trade deficit with China, which stood at $375 billion previous year.