Treasury Secretary Says U.S., China Have Suspended Tariffs

Published on: May 21, 2018
Author: Hans Stone

The U.S. suspended its threat to put tariffs on $150 billion in imports of Chinese goods while negotiations with China continue, but President Donald Trump could still impose the tariffs if a deal between the two countries doesn’t progress, Treasury Secretary Steven Mnuchin said.

“Both parties have agreed to suspend the tariffs,” Mr. Mnuchin said Monday in an interview on CNBC, echoing remarks he gave over the weekend.

If the negotiations aren’t successful, however, “the president can always put tariffs back on,” he said.

Liu He, the Chinese vice premier who led Beijing’s delegation to Washington last week, has also said China is holding off on tariffs for now. “Both sides agreed to avert a trade war and to stop imposing tariffs on each other,” Mr. Liu said, according to the official Xinhua News Agency over the weekend.

The U.S. negotiations were focused on proposed tariffs on $150 billion of imported Chinese goods that followed an investigation from the U.S. Trade Representative on China’s trade practices. These tariffs, which have now been placed on hold, never formally went into effect. Other U.S. tariffs that are in effect, such as those on steel and aluminum, would need to be reversed through a formal process.

Similarly, China had a prospective list of tariffs on $50 billion in U.S. goods that hadn’t been formally imposed, but China also has existing tariffs on a number of U.S. exports that are formally in place.

There is no specific timetable for the next steps in the negotiations, Lawrence Kudlow, the director of the National Economic Council, said on Monday.

“Tariffs are suspended right now, that’s a good thing,” Mr. Kudlow said, also speaking on CNBC. “But you cannot remove tariffs as a negotiating tool or an enforcement tool from this process.”

Their remarks came a day after Mr. Mnuchin and U.S. Trade Representative Robert Lighthizer both made statements that had left the exact position of the U.S. unclear.

Mr. Mnuchin said Sunday that the tariffs were suspended, and hours later Mr. Lighthizer issued a statement emphasizing the U.S. might still resort to tariffs. Mr. Mnuchin said Monday that he, Mr. Lighthizer and Commerce Secretary Wilbur Ross are “completely on the same page.”

Mr. Trump touted the weekend deal on Monday morning, tweeting that “China has agreed to buy massive amounts of ADDITIONAL Farm/Agricultural Products – would be one of the best things to happen to our farmers in many year!” He also said, “On China, Barriers and Tariffs to come down for the first time.”

Trade officials say that any surge in U.S. agriculture exports to China depends on settling the trade dispute and on China substantially easing tariffs and other trade barriers on U.S. exports of pork and corn, among other products. Farm groups now are dealing with Chinese tariffs on sorghum and other products imposed after the U.S. levied tariffs on Chinese steel and aluminum.

Mr. Ross of the Commerce Department will travel soon to China to discuss Beijing’s commitment to buy more agriculture and energy exports from the U.S.

Mr. Trump had asked the Treasury to report to him by Monday on progress it is making in devising rules that would restrict Chinese investment in the U.S. if Beijing doesn’t ease limits on U.S. companies operating there. Mr. Mnuchin updated Mr. Trump on Monday, and they discussed options for restrictions, but made no public statement about the details.