US, China back off on tariffs

WASHINGTON: US Treasury Secretary Steven Mnuchin confirmed Sunday that Washington and Beijing have agreed to back off from imposing tariffs on each other, a day after reaching an accord on slashing the American trade deficit with China.

“We have made very meaningful progress and we agreed on a framework,” Mnuchin told Fox News Sunday. “So right now we have agreed to put the tariffs on hold while we try to execute the framework.”

China’s Vice Premier Liu He, who led a high-level delegation to the United States this week, meantime confirmed that “the two sides reached a consensus, will not fight a trade war, and will stop increasing tariffs on each other,” official Chinese news agency Xinhua reported.

The apparent detente between the two economic giants follows months of increasing tensions that have set markets on edge over fears of a damaging trade war. The US-Chinese thaw raised concerns in some other countries still facing potential US tariffs, however, with France saying it could come “at the expense of Europe.”

Mnuchin emphasized Sunday that the sides had also discussed structural changes by Beijing “to make sure that we have a fair ability to compete” in its vast market. US-China trade deal could cost Europe: French minister: Europe could end up rueing a potential new deal between China and the United States after the two sides stepped back from a trade war, France’s Economy Minister Bruno Le Maire warned Sunday.

“The United States and China risk entering an agreement at the expense of Europe if Europe is not capable of showing a firm hand,” Le Maire told CNEWS television.“The United States wants to make Europe and European countries pay for China’s bad behaviour. All of that is totally absurd and incomprehensible for allies,” he said.

Trump had threatened China with tariffs on up to $150 billion (127 billion euros) of imports, prompting Beijing to warn it would target US agricultural exports, aircraft, and even whiskey.US levies on $50 billion of Chinese imports could have come into effect as early as next week.