Mnuchin Says China Trade Meeting Will Happen But Won’t Say When
Tensions between the two nations reached a fresh peak last Friday when China threatened retaliatory tariffs against the U.S.
(Bloomberg) -- Terms of Trade is a daily newsletter that untangles a world embroiled in trade wars. Sign up here.
Treasury Secretary Steven Mnuchin said U.S. trade officials expect Chinese negotiators to visit Washington, but wouldn’t say whether a previously planned September meeting would take place.
“We continue to have conversations. We’re planning for them to come,” Mnuchin said Wednesday in an interview, declining to say whether the September encounter would happen.
Concern about prospects for a trade breakthrough weighed on markets on Thursday. Futures on the S&P 500 Index fell 0.4% and most Asian equity indexes traded lower, while the yen advanced.
“There’s no appetite to actively trade equities right now,” said Ayako Sera, a market strategist at Sumitomo Mitsui Trust Bank Ltd. in Tokyo. “There will be another round of tariff increases on Chinese goods at the start of September. Investors’ current stance probably is to see through carefully what kind of impact the latest tariff hike has on the global economy.”
Tensions between the two nations reached a fresh peak last Friday when China threatened retaliatory tariffs against the U.S. and President Donald Trump responded with a plan to ratchet up duties on Chinese products further and ordered American companies to look for alternatives to the country. The remarks prompted U.S. stocks to suffer one of their worst losses of the year.
By Monday, Trump had softened his tone, saying the two nations had had phone conversations and that China was eager to strike a deal.
Compounding the battle over tariffs, the two nations are engaged in a dispute over the value of their currencies. Mnuchin said Wednesday that he’s been in contact with China’s top central banker, the International Monetary Fund and other counterparts in Beijing over what the U.S. has deemed manipulation of the yuan.
“We’ve had conversations with the IMF and directly with our counterparts in China, including the governor of the PBOC,” since the U.S. formally labeled China a currency manipulator on Aug. 5, Mnuchin said, referring to Yi Gang, who heads the People’s Bank of China.
China’s currency broke the 7 per dollar level earlier this month for the first time since 2008, unleashing tumult across global markets. The U.S.’s manipulator announcement followed a declaration by PBOC’s Yi that his nation wouldn’t use the yuan as a tool to deal with trade disputes.
The designation of China as a currency manipulator was seen as largely symbolic since the potential penalties are less punitive than steps Trump has already taken against China.
“We will have a separate dialog and discussion on currency as part of the trade discussion but separate from the trade discussion,” Mnuchin said.
To contact the reporter on this story: Saleha Mohsin in Washington at smohsin2@bloomberg.net
To contact the editors responsible for this story: Alex Wayne at awayne3@bloomberg.net, Joshua Gallu, John Harney
©2019 Bloomberg L.P.