Next round of US tariffs on China at least a month away, says Treasury Secretary Mnuchin

US Treasury Secretary Steven Mnuchin says the US is at least a month from enacting its proposed tariffs on Chinese imports. — Reuters
US Treasury Secretary Steven Mnuchin says the US is at least a month from enacting its proposed tariffs on Chinese imports. — Reuters

WASHINGTON, May 23 ― The United States is at least a month from enacting its proposed tariffs on US$300 billion (RM1.25 trillion) in Chinese imports as it studies the impact on American consumers, US Treasury Secretary Steven Mnuchin said yesterday.

Washington this month hiked existing tariffs on US$200 billion in Chinese goods to 25 per cent from 10 per cent, prompting Beijing to retaliate with its own levies on US imports, as talks to end a 10-month trade war between the world's two largest economies stalled.

US President Donald Trump, who has embraced protectionism as part of an “America First” agenda aimed at rebalancing global trade, has threatened to slap tariffs of up to 25 per cent on an additional list of Chinese imports worth about US$300 billion.

“There won't be any decision probably for another 30 to 45 days,” Mnuchin said in a hearing before the US House of Representatives Financial Services Committee.

That timeline, which is accelerated compared to previous rounds of tariffs, means the next levies could be ready around the time when Trump is expected to meet Chinese President Xi Jinping at a G20 summit in Japan June 28-29.

“I'm still hopeful we can get back to the table. The two presidents will likely see each other at the end of June,” Mnuchin said, adding that the impact of tariffs on American consumers was a key consideration in the US trade strategy.

Walmart Inc, the world's largest retailer, has said its prices will rise because of higher tariffs on Chinese goods.

Mnuchin said the Trump administration is open to holding new talks with China if the two sides can proceed on the basis of previous negotiations.

No high-level talks have been scheduled since the end of two days of discussions in Washington on May 10, the day Trump imposed the higher levies on Chinese goods.

Huawei fallout

The seeds of the current stalemate were sowed when Chinese officials sought major changes to the draft text of a deal that the Trump administration says had been largely agreed.

The Chinese government's top diplomat Wang Yi said yesterday that China's door would always be open to further trade talks with the United States, but added that Beijing would not accept any unequal agreements.

Acrimony between the two countries has intensified since Washington put Chinese telecom equipment company Huawei Technologies Co Ltd on a blacklist that curbs Huawei's access to US-made components last week.

The move is a potentially devastating blow for the company and has rattled technology supply chains and investors.

Some mobile operators, including the Ymobile unit of Japan's Softbank Corp and rival KDDI Corp, put launch plans for Huawei's new P30 Lite smartphone on hold yesterday.

A person briefed on the matter said the United States is considering Huawei-like sanctions on Chinese video surveillance firm Hikvision Digital Technology Co Ltd over Beijing's treatment of its Uighur Muslim minority.

Global equity markets slid yesterday as investors sought safety in bonds, the Japanese yen and Swiss franc amid renewed worries over the standoff after the Hikvision report.

British chip designer ARM said it had halted relations with Huawei to comply with the US blockade, and mobile operators EE and Vodafone said they had dropped Huawei smartphones from the imminent launch of their 5G networks.

Huawei said it valued its close relationships with its partners but recognised the pressure some of them are under “as a result of politically motivated decisions”.

China will not bend

China has not said whether or how it may retaliate against the measures directed at Huawei, but state media have taken an increasingly nationalistic tone and vowed Beijing will not bend to US pressure.

China will have to overcome major risks and challenges, state news agency Xinhua paraphrased Xi as saying on a trip this week to the southern province of Jiangxi, a cradle of China's Communist revolution.

“We must be conscious of the long-term and complex nature of various unfavorable factors at home and abroad, and appropriately prepare for various difficult situations,” Xi said.

The report did not elaborate and did not directly mention the trade war or the United States.

US firms said in a survey released yesterday they were facing retaliation in China over the dispute.

The American Chamber of Commerce in China and its sister body in Shanghai said members reported increased obstacles such as government inspections, slower customs clearances and longer waits for approval for licensing and other applications.

It said 40.7 per cent of respondents were considering relocating or had relocated manufacturing facilities outside of China. Of the almost 250 respondents to the survey, which was conducted after the latest round of tariffs, nearly three-quarters said the levies were hurting their competitiveness.

The United States is seeking sweeping changes to China's trade and economic policies, including an end to forced technology transfers and theft of US trade secrets. Washington also wants curbs on subsidies for Chinese state-owned enterprises and better access for US firms in Chinese markets.

“The idea is not to have tariffs, the idea is for them (China) to treat our companies fairly,” Mnuchin said yesterday, and referred to the impact on US agriculture, which has been among the targets of China's retaliatory tariffs.

US Agriculture Secretary Sonny Perdue said last week a new aid package for farmers hurt by China's tariffs was likely to amount to between US$15 billion and US$20 billion, exceeding the up to US$12 billion in aid rolled out last year. ― Reuters