Steven Mnuchin, the US Treasury secretary, has sought to insulate a crucial round of trade negotiations with Beijing from this week’s criminal charges against Huawei, China’s top telecommunications equipment company, which has ratcheted up tensions between Washington and Beijing.
Speaking on Fox Business Network on Tuesday, Mr Mnuchin said the Huawei charges — which were announced by the justice department on Monday — should not be “confused” with the high-level trade negotiations, which are due to kick off on Wednesday.
“You can easily separate these issues,” said Mr Mnuchin, who will be flanking Robert Lighthizer, the US trade representative, in negotiations with Liu He, Chinese vice-premier. He noted that he did not have advanced knowledge of the indictments against Huawei until Monday.
“We are focused on unfair economic practices . . . violations of US law or US sanctions are going through a separate track,” he said.
Mr Mnuchin said he expected “significant progress” in the trade negotiations despite concerns that Chinese officials will be less willing to offer big concessions to the Trump administration in the wake of the Huawei indictment.
A breakthrough in negotiating sessions with Mr Liu this week is considered crucial if the US and China are to craft a deal by March 2, the deadline the countries have set to reach an agreement and prevent a new escalation in tariffs.
Although China has signalled that it is ready to boost its purchases of US goods to narrow the bilateral trade deficit, it has not shown much willingness to offer big concessions on structural economic reforms demanded by the US, including cracking down on industrial subsidies and the forced transfer of technology.
Chinese officials reacted angrily to the Huawei indictment, which alleged that the company was stealing US technology and violating American sanctions on Iran.
“It is neither fair nor ethical to use state power to discredit and attack specific companies without any evidence,” said a spokesman for China’s Ministry of Industry and Information Technology. Huawei has denied the allegations.
However, Mr Liu did not cancel the trade talks or comment on the state of the negotiations in the wake of the Huawei indictment. He is expected to meet President Donald Trump at the end of the talks on Thursday.
If no deal is reached by March 2, US tariffs on some $200bn worth of Chinese goods will rise from 10 per cent to 25 per cent, which could deliver a new hit to the Chinese economy at a time of great concern in Beijing about a slowdown.
Depending on the level of concessions delivered by Beijing to Mr Trump, a deal with Washington could result in the elimination of some or all US tariffs, which the administration has not ruled out.
“Everything is on the table,” Mr Mnuchin said. “The objective is to have a very fair deal . . . the president hasn’t made any decision.”
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