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Trade war

US and China to set up offices to enforce trade deal, says Mnuchin

Treasury secretary indicates progress made on key sticking point

U.S. Treasury Secretary Steven Mnuchin testifies before a House Financial Services Committee on Tuesday.   © Reuters

WASHINGTON -- The U.S. and China have basically agreed on a mechanism in which Washington can confirm whether Beijing is complying with the terms of a possible trade deal, U.S. Treasury Secretary Steven Mnuchin said on Wednesday.

"We've pretty much agreed on an enforcement mechanism, we've agreed that both sides will establish enforcement offices that will deal with the ongoing matters," Mnuchin said in a CNBC interview. 

The administration of U.S. President Donald Trump has voiced concerns over whether China will stick to promises made in the trade talks, and the establishment of an enforcement mechanism has been a major sticking point.

The secretary did not go into the details, such as a penalty clause in which Washington reimposes tariffs should Beijing violate the trade deal or what will happen to the tariffs currently in force.

The two nations have been discussing the issue in talks at various levels. While the details are still unknown, Mnuchin's remarks suggest that both sides seek to ensure effective enforcement by setting up a semipermanent framework.

Mnuchin and U.S. Trade Representative Robert Lighthizer, the top trade negotiator, spoke with Chinese Vice Premier Liu He over the phone on Tuesday. They are scheduled to talk again on Thursday.

Mnuchin declined to offer a time table for reaching a deal, which the two sides hope to sign at a summit between Trump and Chinese President Xi Jinping.

"It's important for the two leaders to meet and we're hopeful we can do this quickly, but we're not going to set an arbitrary deadline," Mnuchin said.

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