While there is no sign Beijing and Washington are ready to resume trade talks that stalled last month after 11 rounds of negotiations, U.S. Treasury Secretary Steven Mnuchin said he had a constructive meeting Sunday with China's central bank Gov. Yi Gang on the sidelines of a financial leaders' meeting in Fukuoka.
"We made enormous progress, I think we had a deal that was nearly 90% done", Mnuchin told CNBC.
The world's top finance policymakers Sunday weighed the impact of ballooning trade tensions on the global economy amid differences over the extent to which they are dragging on growth. "Our objective is to get the right agreement, not just to get an agreement".
As companies move out of China in order to avoid U.S. tariffs, "there's going to be a big economic opportunity for a lot of other countries", he said.
The initiative was debated on Thursday during a G20 Ministerial Symposium in the Japanese city of Fukuoka, with the world's leading industrialized countries coming out in favour of setting up a new tax model that is adapted to the digital economy, reports Efe news.
The meeting is expected to put trade negotiations back on track, after talks broke down about a month ago amid tariff threats from both sides.
The new U.S. -Mexico-Canada deal has been heading toward a vote in Congress and might have been stymied by new tariffs.
Meanwhile, French Finance Minister Bruno Le Maire said there was a "real risk" that "this global economic slowdown could turn into a global economic crisis due to trade tensions".More news: President Trump suspends plan to impose tariff on Mexican products
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Mnuchin met People's Bank of China (PBOC) Governor Yi Gang on Sunday in the first meeting of high-level USA officials in a month, but it produced no immediate result.
A Japanese official who declined to be named briefed reporters that "very many countries voiced concerns that escalation of the trade friction is a very significant downside risk to the world economy". Those tactics, the USA contends, include hacking into US companies' computers to steal trade secrets, forcing foreign companies to hand over sensitive technology in exchange for access to the Chinese market and unfairly subsidizing Chinese tech firms.
The bickering over trade language has dashed hopes of Japan, which chairs this year's G20 meetings, to keep trade issues low on the list of agendas at the finance leaders' meeting.
Christine Lagarde, managing director of the International Monetary Fund, likewise was blunt in warning of the potential toll from the tit-for-tat tariff hikes and other retaliatory moves between Washington and Beijing with talks on resolving their dispute in a stalemate, saying that the "road ahead remains precarious". The next day, the Trump administration raised tariffs on billions of dollars of Chinese goods to 25 percent.
Mnuchin told Reuters that the Huawei sanctions were "completely separate" from the U.S. The statement also contains no admissions that the deepening US-China trade conflict is hurting global growth. The countries are unable to find a compromise on Trump's tariffs, with the USA arguing for keeping many of them and Beijing insisting that they must come off as part of any trade deal.
"There will be winners and losers", he predicted.
At the meeting of trade and economy ministers in Tsukuba, a government research hub, the officials endorsed a similar set of recommendations, while also issuing a mild call to "handle trade tensions and to foster mutually beneficial trade relations".