“We made enormous progress, I think we had a deal that was almost 90% done,” Mnuchin told CNBC. “China wanted to go backwards on certain things,” which Beijing has denied.
“We’ve stopped negotiating,” Mnuchin said, with the next steps depending on Trump’s meeting with Xi in Osaka, Japan at the G-20 meeting of world leaders at the end of June.
“The president will make a decision [on tariffs] after the meeting,” Mnuchin said. “I believe if China is willing to move forward on the terms that we were discussing, we’ll have an agreement. If they’re not, we will proceed with tariffs.”
Trump has already imposed tariffs on $200 billion worth of Chinese goods, but now is weighing whether to tax an additional $325 billion worth of Chinese products, a move that would encompass virtually all Chinese goods exported to the U.S. The world’s two biggest economies have sparred for months over a trade deal, but not been able to reach an agreement.
Trump’s threatened tariff hike came as G-20 finance ministers meeting in Fukuoka, Japan, said that trade and geopolitical conflicts are risking global economic growth, but at the U.S. insistence, dropped a call to “recognize the pressing need to resolve trade tensions.”
“Global growth appears to be stabilizing and is generally projected to pick up moderately later this year and into 2020,” the finance chiefs, including Mnuchin, said in an end-of-meeting communique. “However, growth remains low and risks remain tilted to the downside. Most importantly, trade and geopolitical tensions have intensified. We will continue to address these risks and stand ready to take further action.”
International Monetary Fund Managing Director Christine Lagarde emphasized that “the first priority should be to resolve the current trade tensions” while working to modernize international trading rules. But the communique contained no assessment that the U.S.-China trade conflict was inhibiting global growth.
The IMF warned last week that a continuing U.S.-China standoff on tariffs could cut a half percentage point from the global economy in 2020.