- A phase-two trade agreement between the US and China would further ease tariffs between the nations, Treasury Secretary Steven Mnuchin told CNBC on Wednesday.
- The comments arrive hours before the two economic superpowers ink a phase-one deal in the first major trade war deescalation since it began in summer 2018.
- President Trump previously hinted a phase-two agreement would arrive soon, tweeting on December 31 that he’d travel to Beijing for deal discussions after signing the preliminary deal.
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The phase-one trade deal between the US and China is scheduled to be signed at the White House later today, and Treasury Secretary Steven Mnuchin is already promising tariff rollbacks in the next agreement.
The Trump administration official said the next step in the trade-war deescalation would include tariff reversals similar to those expected from the phase-one deal, CNBC reported Wednesday.
“Just as in this deal there were certain rollbacks, in ‘phase two’ there will be additional rollbacks,” Mnuchin told CNBC. “The first step is really focusing on enforcement, but this gives China a big incentive to get back to the table and agree to the additional issues that are still unresolved.”
Mnuchin’s statement arrives hours before top American and Chinese officials are expected to ink the first major deal in the trade war since it began in summer 2018. The agreement calls on China to purchase up to $US200 billion worth of US goods. The nation is also expected to tighten intellectual property laws and boost transparency within its financial sector.
In turn, the Trump administration agreed to slash in half a 15% duty on $US110 billion worth of imports and delay future escalations. The rates on the remaining $US250 billion worth of tariffs held steady.
The phase-one agreement was initially set to reverse some of the $US360 billion worth of tariffs the Trump administration has levied on China, but officials have since walked back any promises of tariff deescalation through the Wednesday deal. There’s still a chance the US lowers tariffs after China meets certain criteria set in the preliminary deal, though specific deadlines or deescalation methods haven’t been established.
“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,” Mnuchin and US Trade Representative Robert Lighthizer said in a joint statement to Business Insider.
President Trump first hinted at a near-term deadline for the phase-two deal on December 31, tweeting he would travel to Beijing to discuss a second trade truce in the near future.
“I will be signing our very large and comprehensive Phase One Trade Deal with China on January 15,” Trump said, adding, “At a later date I will be going to Beijing where talks will begin on Phase Two!”
The phase-one deal was first announced on December 13, signalling a phase-two agreement could come to fruition in a matter of weeks.
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