US Treasury Secretary Steven Mnuchin said on Wednesday that the United States and China were close to a trade deal, and that he believes the weekend talks between the two sides will help take the process forward.
“We were about 90 percent of the way there (with a deal) and I think there’s a path to complete this,” Mnuchin told CNBC.
He said he’s confident that US President Donald Trump and Chinese leader Xi Jinping, who will meet during the G20 summit in Japan, can make progress in the stalled trade talks.
“President Trump and President Xi have a very close working relationship. We had a productive meeting at the last G-20,” Mnuchin said, adding that there could be a win-win situation for both nations.
“I think there is a good outcome for their economy and the US economy to get balanced trade and to continue to build on this relationship,” he added.
Mnuchin’s words and tone suggest that Trump may focus more on improving the trade deficit situation and put less emphasis on urging China to reform on matters such as cutting government subsidies, ending forced technology transfers, etc.
Some might question why Washington seems to have suddenly softened its stance.
The answer may lie in a New York Times report that outlined how some big tech firms have found a way to bypass the US government ban on selling products to Huawei.
By manufacturing outside the US, industry leaders including Intel and Micron can avoid labeling goods as American-made, New York Times reported, citing unnamed sources. Sales through this channel ares already said to amount to hundreds of millions of dollars.
If the US-derived content of a product is below 25 percent, they are not subject to the ban.
This underscores how difficult it is for the Trump administration to contain companies like Huawei.
More seriously, if this becomes a trend, Trump’s intention to contain China’s tech industry could backfire and the US may end up the biggest loser.
This article appeared in the Hong Kong Economic Journal on June 27
Translation by Julie Zhu
[Chinese version 中文版]
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