After G-20 truce, US and China are still gridlocked on trade

With the trade war more than a year old, the US Treasury secretary said the two countries will likely speak this week.

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    The United States and China have yet to resolve their issues on trade and tariffs, but President Trump's Treasury secretary may soon head to Beijing if a call this week results in 'significant progress' [Kevin Lamarque/Reuters]
    The United States and China have yet to resolve their issues on trade and tariffs, but President Trump's Treasury secretary may soon head to Beijing if a call this week results in 'significant progress' [Kevin Lamarque/Reuters]

    Treasury Secretary Steven Mnuchin said he and U.S. Trade Representative Robert Lighthizer may travel to Beijing for trade negotiations if talks by phone this week are productive.

    "We expect to have another principal-level call this week, and to the extent we make significant progress, I think there's a good chance we'll go there later," Mnuchin said Monday at a briefing for reporters at the White House.

    The planned phone call would be the second time the top trade negotiators have spoken since Trump and Chinese President Xi Jinping called a truce in their year-long trade war during the G-20 meeting at the end of June. The leaders agreed to restart talks for a trade deal -- which had collapsed in May -- but they gave no concrete time-frame to reach a deal.

    Earlier Monday, Trump indicated the U.S. tariffs on China were having their intended impact by squeezing China's economy, tweeting, "The United States tariffs are having a major effect on companies wanting to leave China for non-tariffed countries. This is why China wants to make a deal."

    Trump's comments came hours after China released figures showing growth in the world's second-largest economy slowed to 6.2% in the second quarter, the weakest pace since at least 1992 when the country began collecting the data.

    Farm Deals

    Meanwhile, Trump last week complained that China wasn't following through on a promise that Xi made at the G-20 meeting to increase purchases of American farming products. China, for its part, has since said it's considering buying more U.S. soybeans, corn and pork as a cooperative gesture but that total volumes will depend on the progress of the trade talks.

    During the last detente in December, China had committed to buying over 20 million tons of U.S. soy, pork and corn. After talks fell apart in May, China said it would continue with the purchases, though it did ask for some shipments to be delayed.

    The U.S. expects China to announce significant purchases of American agriculture products, Trump's top economic adviser Larry Kudlow told reporters on Monday, implying that the step is necessary for trade talks between two nations to advance. "We expect China to be announcing shortly some large scale purchases of farm goods and services," Kudlow said.

    Mnuchin said he's "hopeful" that Congress will approve the USMCA, the successor to the North American Free Trade Agreement. Trump said on Monday that if Democrats block the United States-Mexico-Canada Agreement he will resort to "Plan B," without elaborating.

    SOURCE: Bloomberg