US, China putting trade war on hold after progress in talks

WASHINGTON (AP):

The United States and China are pulling back from the brink of a trade war after the world's two biggest economies reported progress in talks aimed at bringing down America's massive trade deficit with Beijing.

"We are putting the trade war on hold," Treasury Secretary Steven Mnuchin said yesterday.

After high-level talks on Thursday and Friday in Washington, Beijing agreed in a joint statement with the US to "substantially reduce" America's trade deficit with China but did not commit to cut the gap by any specific amount. The Trump administration had sought to slash the deficit by $200 billion.

Still, Mnuchin said that the two countries had made "meaningful progress" and that the administration has agreed to put on hold proposed tariffs on up to $150 billion in Chinese products. China had promised to retaliate in a move that threatened a tit for tat trade war.

He said that they expect to see a big increase - 35 per cent to 45 per cent this year alone - in US farm sales to China. Mnuchin also forecast a doubling in sales of US energy products to the Chinese market, increasing energy exports by $50 billion to $60 billion in the next three years to five years.

Commerce Secretary Wilbur Ross, who has been part of the US negotiating team, will go to China soon to follow up on last week's discussions, Mnuchin said.