In what looks to us like confirmation that the US has officially kicked the can down the road, Treasury Secretary Steven Mnuchin said Sunday that China and the US were putting a trade war "on hold" as the two sides work to hammer out a comprehensive trade agreement that will be acceptable to both sides.
Mnuchin, who was in Beijing last week for trade talks with top Chinese officials, emphasized that Trump isn't giving up on holding China accountable - the process is just taking longer than some had hoped.
"Right now Chris we're going to put the trade war on hold...we made very meaningful progress and we agreed on a framework. The framework includes their agreement to substantially reduce the trade deficit by increasing their purchases of goods," Mnuchin said, adding the two sides have agreed to numerical targets but the he didn’t want to disclose them.
"We’re putting the trade war on hold, right now, we have agreed to put the tariffs on hold while we try to executive the framework," Mnuchin said.
Mnuchin’s comments come after China and the US on Saturday released a joint statement in which China proposed to "significantly increase purchases" of US goods.
Moving on to the subject of ZTE, which President Trump said he'd work to get ZTE "back into business" at the request of Chinese President Xi Jinping, Mnuchin said that "President Xi asked President Trump" to look into the situation at the Chinese telecoms giant, which isn't a surprise, he said. Still, Mnuchin insisted that Trump wants us to be "very tough" on ZTE.
"The president wants us to be very tough on ZTE. And all he did was ask the secretary to look into this," Mnuchin said, referring to Commerce Secretary Wilbur Ross.
Of course, while "no trade war with China" is the headline that the Trump administration wants investors to focus on, the real news is that there might not be a Nafta deal until next year as Mnuchin says we're still "far apart" on Nafta.
Mnuchin added that Trump is more concerned with striking a good deal on Nafta than rushing something through this year.
"The president is more determined to have a good deal than he's worried about any deadline...So, whether we pass it in this Congress or we pass it in the new Congress, the president is determined that we renegotiate NAFTA."
Still, that doesn't mean Trump won't follow through on threats to withdraw from the pact or take other action, if he decides that's the best option, Mnuchin indicated.
"He has all his alternatives. I'm just saying right now we're focused on negotiating a good deal and we're not focused on specific...