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Trade tensions

US and China signal readiness to defuse trade war

Mnuchin prepared to meet 'anytime' if Beijing serious about 'structural changes'

U.S. Treasury Secretary Steven Mnuchin testifies at a House Financial Services Committee hearing on the state of the international financial system in Washington on July 12.   © Reuters

WASHINGTON -- The U.S. toned down its trade rhetoric on Thursday, conveying a willingness to resolve the trade war as Beijing expressed a desire to return to the previous detente.

U.S. Treasury Secretary Steven Mnuchin told lawmakers that if the Chinese side is up for "serious efforts to make structural changes," then he and the administration are "available anytime" to discuss them.

"We are advocating no tariffs, no tariff barriers, no subsidies," Mnuchin said.

"We are advocating growing exports for U.S. companies so they can compete fairly and if we have fair trade, we will increase exports significantly and we won't have the outsized trade imbalance that we have," he added.

Mnuchin's testimony to the House Financial Services Committee came two days after the Trump administration announced a new list of tariffs that would target $200 billion of Chinese exports to the U.S.

Actually imposing the tariffs, after a public comment period until August 30, would mark a serious escalation of the trade war. Growing voices in Congress and industry have pushed for talks between both governments to find a way to ease the tensions.

Meanwhile, in Geneva, Chinese Vice Commerce Minister Wang Shouwen signaled to reporters that China was caught off-guard by the additional tariffs.

Wang said the four rounds of high-level bilateral talks in recent months "produced progress, so much so that the U.S. government said they would put the trade war on hold, but all of a sudden an announcement was made to impose tariffs on imports from China," Reuters reported. But now, the U.S. is just being "a trade bully," he said.

For talks to succeed, "one party needs to take the gun off the head of the other party," Wang said. "If one side keeps chopping and changing all the time the talk will be pointless."

At the U.S. House hearing on Thursday, Mnuchin was grilled by lawmakers from states that strongly favored Trump in the 2016 presidential race but worry that a Sino-American trade war could hurt their constituents.

"It's a bad time to be an American SUV producer or an American soybean farmer," committee chairman Texas Republican Jeb Hensarling said. "The soybean prices have dropped to their lowest level in almost a decade."

Ann Wagner, a fellow Republican agreed. "The recent Chinese tariffs on American soybeans will hit Missouri hard and already have," she said of her home state. They are "causing real harm in present day to the farming community and the soybean farmers."

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