Treasury Secretary Steven Mnuchin and some Trump administration officials are pushing for the US to lift tariffs on Chinese goods to calm worried investors and get Beijing on board with a larger trade deal, according to a new report.
The Wall Street Journal reported on Thursday that Mnuchin had brought up the idea of removing some or all tariffs on Chinese goods as an incentive for China to agree to a deal. More hawkish members of President Donald Trump’s trade team, including US Trade Representative Robert Lighthizer, the lead negotiator with Beijing, are said to be against such a move.
The US has imposed tariffs on $250 billion worth of Chinese goods coming into the country.
Lighthizer has expressed concern that lifting the tariffs would squander any leverage the US has on China and would result in a less favorable deal, according to The Journal. Trump’s preference for tariffs and hard-nosed trade views have usually hewed closer to Lighthizer’s opinions than Mnuchin’s.
But according to The Journal, Trump has recently pressured Lighthizer to reach a deal and avoid a possibly devastating escalation of the trade war.
The US and China are in a trade-war ceasefire, with no new tariffs or increase in duties allowed to go into effect until March 1. After then, the US’s 10% tariff on $200 billion worth of Chinese goods is set to increase to 25%. Trump has also threatened to impose tariffs on the remaining $267 billion worth of Chinese goods not caught up in the trade war.
US and Chinese officials have met in recent weeks to try to hash out a trade deal. Chinese Vice Premier Liu He, the country’s top economic official, is scheduled to come to Washington, DC, on January 30 for talks.
The trade war began in earnest in March, when Trump announced the US would impose tariffs on $50 billion worth of Chinese goods as a response to China’s alleged theft of US intellectual property. China responded with tariffs of equal size and severity on US goods.
The response prompted Trump to move forward with another round of tariffs, on $200 billion worth of goods. China hit back with tariffs on $60 billion worth of American goods at the end of September.
The back-and-forth resulted in a shaky stock market and economic concerns, which eventually compelled Trump to try to make a deal. At the G20 summit in Argentina, Trump and Chinese President Xi Jinping agreed to a détente and committed to working on a deal.
A Treasury Department representative denied The Journal’s report in a statement to CNBC.
“Neither Secretary Mnuchin nor Ambassador Lighthizer have made any recommendations to anyone with respect to tariffs or other parts of the negotiation with China,” the representative said. “This an ongoing process with the Chinese that is nowhere near completion.”