U.S. Hints at China Truce as World Warns of Trade-War Threat

Mnuchin speaks during a briefing at the IMF spring meetings April 21. Photographer: Andrew Harrer/Bloomberg

 

  • Treasury’s Mnuchin considers China trip amid trade dispute
  • China’s Commerce Ministry confirms U.S. has requested visit

U.S. Treasury Secretary Steven Mnuchin said he’s considering a trip to China amid a trade dispute with Beijing that finance chiefs warn could derail the global economic upswing.

Mnuchin said he’s “cautiously optimistic” of reaching an agreement with China that bridges their differences over trade.

“A trip is under consideration,” Mnuchin told reporters on Saturday in Washington at the IMF’s spring meetings. “I’m not going to make a comment on timing, nor do I have anything confirmed.”

China’s Ministry of Commerce said Sunday it is aware that the U.S. is considering a visit to Beijing to negotiate economic and trade issues and welcomes such a move.

A visit by the U.S. Treasury secretary to China could signal a breakthrough in the spat between the world’s two-biggest economies, whose threats to slap tariffs on each other have rattled markets and raised fears of a trade war. It would come at a sensitive time for the region’s geopolitics, with negotiations under way on a planned meeting between President Donald Trump and North Korean leader Kim Jong-Un.

Mnuchin’s remarks came as finance ministers and central bankers at the IMF meetings gave their latest economic assessments, often citing trade as a threat looming over the strongest upswing in seven years.

Global growth has strengthened and is increasingly broad based, the IMF’s main advisory committee said Saturday. However, it noted that “rising financial vulnerabilities, increasing trade and geopolitical tensions, and historically high global debt threaten global growth prospects.”

Don’t expect too much from Mnuchin’s visit, said Gai Xinzhe, an analyst at Bank of China’s Institute of International Finance in Beijing. “It’s likely that they come and demand a price that’s too high for China. Then the two sides just end on a sour note, and the trade war continues. I’m not optimistic as it seems that Trump himself doesn’t know what he wants to get from China.”

China Meeting

IMF First Deputy Managing Director David Lipton summed up the main takeaway he heard from officials at the meetings this week as “times are good but it’s getting risky.”

Mnuchin said he met with Yi Gang, governor of the People’s Bank of China, at the IMF gathering this week. The discussions focused on issues related to the Chinese central bank, not trade, said the secretary. Mnuchin said they also discussed China’s planned further opening of some markets, a move that U.S. has encouraged and “appreciated.”

“China will vigorously push forward the reform and opening-up of the financial sector, significantly relax market access restrictions, create a more attractive investment environment, strengthen the protection of intellectual properties and actively expand imports,” Yi said in a statement on Saturday. China has announced plans to gradually remove foreign ownership caps for limits for car-, ship- and aircraft-makers.

Russia, Japan

Mnuchin also said he met with Russian Finance Minister Anton Siluanov during the IMF meeting, at Russia’s request. Moscow sought “clarification” on U.S. sanctions, Mnuchin said, without elaborating. “These are very important tools. We will continue to look at the use of sanctions in all different areas,” he said.

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