Treasury Secretary Steven Mnuchin has proposed lifting all or some of the tariffs on China, the Wall Street Journal reported on Thursday.
Treasury officials have advocated lifting tariffs on Chinese imports to “give Beijing a reason to make deeper concessions in ongoing trade talks between the two countries,” the Wall Street Journal reported, citing people close to the matter.
That would be a sharp reversal of the administration’s earlier stance. The tariffs were put on Chinese goods in the first place to give Bejing an incentive to make concessions to U.S. demands that it give up its predatory mercantilist economic strategy. Many inside the administration, including officials from the Treasury Department and inside the White House, opposed the tariffs before the decision was made to impose them.
U.S. Trade Representative Robert Lighthizer is opposed to lifting or easing the tariffs, arguing the Chinese would consider such a move as a sign of weakness, according to the Wall Street Journal.
Earlier this week, Senator Charles Grassley told reporters that while China had agreed to buy more energy and agricultural products, Lighthizer had told him that there had been essentially no progress on the “structural issues” at the core of the trade dispute.
That was taken by China hawks as reassuring because it suggested that the Trump administration had not lost sight of the most important objections the U.S. has to China’s policies, particularly when it comes to issues around forced technology transfers and the theft of intellectual property.
Thursday’s Wall Street Journal story, however, indicates a risk that the Trump administration could very well be on the brink of kowtowing in the face of China’s intransigence. There are just 43 days left in the trade truce–after which tariffs are set to rise unless the two countries have negotiated an agreement to put aside their differences.
“In past China discussions, Mr. Trump has sided with Mr. Lighthizer on tariffs, rather than Mr. Mnuchin. But this time, the president has made clear he wants a deal—and is pressing Mr. Lighthizer to deliver one, according to people familiar with the discussions,” the Wall Street Journal reported.
In the part, Lighthizer and others have said the U.S. may have to raise tariffs still further before China will be ready to make serious concessions, according to a person familiar with the matter who spoke to Breitbart News.
Stocks got a brief lift from the news before falling back down to previous levels. If the idea was a trial balloon to see how markets would react to a U.S. surrender on tariffs, it sunk.