Mnuchin says new US tariffs on China at least one month away

Treasury secretary tells Congress the Trump administration is studying impact of trade duties on domestic consumers.

    US Treasury Secretary Steven Mnuchin testifies before the US House of Representatives Committee on Financial Services [Mary F. Calvert/Reuters]
    US Treasury Secretary Steven Mnuchin testifies before the US House of Representatives Committee on Financial Services [Mary F. Calvert/Reuters]

    The United States is at least a month away from enacting its proposed tariffs on $300bn worth of Chinese imports as it studies the impact on consumers, US Treasury Secretary Steven Mnuchin said on Wednesday.

    US President Donald Trump, who has embraced protectionism as part of an "America First" agenda aimed at rebalancing global trade, has threatened to slap tariffs of up to 25 percent on that additional list of goods.

    "There won't be any decision probably for another 30 to 45 days," Mnuchin said in a hearing before the US House of Representatives Committee on Financial Services.

    A 30-day window would represent an accelerated schedule compared to previous rounds of US tariffs. And it would mean that the next batch of levies would be ready when Trump meets Chinese President Xi Jinping, as expected, at a G20 leaders summit in Japan on June 28 and 29.

    Earlier this month, Washington hiked existing tariffs on $200bn in Chinese goods, raising them to 25 percent from 10 percent. The move prompted Beijing to retaliate with its own levies on US imports, as talks to end a 10-month trade war between the world's two largest economies stalled.

    "I'm still hopeful we can get back to the table. The two presidents will likely see each other at the end of June," Mnuchin said, adding that the impact of tariffs on US consumers was a key consideration in US trade strategy.

    Mnuchin said the Trump administration is open to holding new talks with China if the two sides can proceed on the basis of previous negotiations.

    Open door?

    No talks between top Chinese and US negotiators have been scheduled since the end of two days of discussions in Washington on May 10, the same day Trump imposed the higher levies on Chinese goods.

    The seeds of the current stalemate were sowed earlier this month when Chinese officials sought major changes to the text of a proposed deal that the Trump administration says had been largely accepted by both nations.

    The Chinese government's top diplomat, Wang Yi, said on Wednesday that China's door would always be open to further trade talks with the US. But he added that Beijing would not accept any unequal agreements.

    The acrimony between the two countries has intensified since last week, when Washington put Chinese telecommunications equipment company Huawei Technologies Co Ltd on a blacklist that curbs Huawei's access to US-made components.

    Another big Chinese firm - video surveillance equipment maker Hikvision Digital Technology Co Ltd - also may face limits on its ability to buy US technology, The New York Times reported, citing people familiar with the matter. The news sent the firm's Shenzhen-listed shares down 5.54 percent.

    The restrictions, which according to the source are among several options being considered by the Trump administration, would severely limit Hikvision's ability to buy US technology from American companies.

    'Treat our companies fairly'

    While China has not said whether or how it may retaliate against the measures targeting Huawei, state media have taken an increasingly strident and nationalistic tone and vowed Beijing will not bend to US pressure.

    However, US firms said in a survey released on Wednesday they were facing retaliation in China over the trade war.

    The American Chamber of Commerce in China and its sister body in Shanghai said members reported increased obstacles, such as government inspections, slower customs clearances and longer waits for approval for licensing and other applications.

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    It also said two-fifths of respondents were considering relocating or had already relocated manufacturing facilities outside of China. Of the almost 250 respondents to the survey, which was conducted after the latest round of US and Chinese tariffs, nearly three-quarters said the levies were hurting their competitiveness.

    Long considered a solid cornerstone in a relationship fraught with geopolitical frictions, the US business community has in recent years advocated a harder line on what it sees as discriminatory Chinese trade policies.

    The US is seeking sweeping changes, including an end to forced technology transfers and theft of US trade secrets. Washington also wants curbs on subsidies for Chinese state-owned enterprises and increased access for US firms in Chinese markets.

    For years, China has blocked major US tech firms, including Google and Facebook, from fully operating in its market. These and other restrictions have fueled calls from within the US business community for Washington to pursue more reciprocal policies.

    "The idea is not to have tariffs, the idea is for them [China] to treat our companies fairly," Mnuchin told US lawmakers.

    SOURCE: Reuters news agency