The United States will maintain tariffs on Chinese goods until the completion of a second phase of a US-China trade agreement, US Treasury Secretary Steven Mnuchin said on Tuesday, a day before the two sides are to sign an interim deal.
Mnuchin told reporters that President Donald Trump could consider easing tariffs if the world’s two-largest economies move quickly to seal a follow-up agreement.”If the president gets a phase two in place quickly, he’ll consider releasing tariffs as part of phase two,” Mnuchin said.
Trump is slated to sign the phase one trade agreement with Chinese Vice Premier Liu He at the White House on Wednesday at 11:30am Eastern US time (16:30 GMT). The signing occurs a week before the US Senate is due to begin its impeachment trial of the US president.
Trump became only the third US president to be impeached when the House last month approved charges that he abused his power by pressuring Ukraine to announce an investigation into Democratic presidential rival Joe Biden and obstructed Congress.
Concerns about the trade deal weighed on US stocks on Tuesday, sending shares lower after a Bloomberg report suggested US tariffs could remain in place until after the November presidential election.
New data showed that the costs of Trump’s trade wars were proving more widespread, deeper and longer-lasting to American manufacturing competitiveness and jobs than previously believed.
Mnuchin and US Trade Representative Robert Lighthizer said earlier there was no agreement in place with China on further tariff reductions.
In a joint statement, they said all aspects of the phase one trade deal with China would be made public on Wednesday, except a confidential annexe that will detail US products and services to be purchased by China.
“There are no other oral or written agreements between the United States and China on these matters, and there is no agreement for future reduction in tariffs. Any rumours to the contrary are categorically false,” they said.
After the phase one deal was reached last month, Washington agreed to suspend tariffs on $160bn in Chinese-made mobile phones, laptop computers and other goods that were due to take effect on December 15 and to halve existing tariffs on $120bn of other goods to 7.5 percent. It kept in place 25 percent tariffs on $250bn of other Chinese goods.
Bearing the cost
US companies have paid $46bn in tariffs since Trump began restructuring relationships with nearly all of Washington’s main trading partners, US data showed.
Trump insists the tariffs are paid by the countries against which they are levied, but US economists and businesses say they bear the brunt of the costs.
Americans for Free Trade, a coalition of more than 150 business associations that oppose tariffs, said the phase one trade deal would do little to alleviate the burden of billions of dollars in tariffs being paid by US businesses.
“The vast majority of the tariffs – which are taxes paid by Americans and not China – will remain in place, continuing to damage the American economy,” said spokesman Jonathan Gold.