USA takes a step back from trade dispute with China

The Financial Times report that the USA has stepped back from the brink of a trade war with China after Washington halted plans to impose tariffs on up to $150bn of imports.

Steven Mnuchin, the US Treasury secretary said on Sunday, “We’re putting the trade war on hold.”

The declaration followed a joint statement from the US and China on Saturday in which Beijing promised to “significantly increase” its purchases of American farm exports and energy and both sides said they would continue talking over the summer.

Saturday’s statement left out detailed targets after Chinese negotiators resisted a Trump administration push to make a commitment to increase purchases by $200bn annually.

The FT report says that critics in the US are concerned that Trump’s administration main emphasis appears to be on meeting the President’s target of reducing the US’s annual $337bn trade deficit with China rather than tackling more difficult structural issues in the Chinese economy, such as Beijing’s subsidisation of key industries and systemic theft of US intellectual property.

Mr Mnuchin insisted on Sunday that Chinese commitments to addressing such issues were part of the broader deal and warned that Mr Trump would be free to impose tariffs if Beijing did not live up to its commitments.  He said the two sides had made “meaningful progress”, adding: “We have agreed to put the tariffs on hold while we try to execute the framework.”