Mnuchin 'cautiously Optimistic' About Trade Talks

US trade negotiators want to make "meaningful progress" in upcoming talks with China, Treasury Secretary Steven Mnuchin said on Thursday, one day after conciliatory gestures by both sides boosted hopes of an eventual resolution.

Mnuchin said on CNBC he is "cautiously optimistic" about chances for a deal to resolve the conflict, but Washington and Beijing will first hold talks at the deputy level to ensure senior officials who meet later can advance.

"We don't want a trip that's just a series of discussions. We want to make meaningful progress," he said.

However, he again warned that President Trump will only accept a good deal, and is willing to raise tariffs if necessary.

There have been positive signs this week in the trade conflict, now entering its second year, as Trump agreed to Beijing's request to delay one round of tariff increases on US$250 billion worth of goods to October 15 after China agreed to spare some US products from its retaliations.

China added Thursday that it was "making enquiries" about buying American farm products including big-ticket items like pork and soybeans, not on its previous list of spared goods.

"It is expected that China will be buying large amounts of our agricultural products!" Trump tweeted early Thursday.

American farmers have borne the brunt of the US-China trade spat, especially after US soy exports collapsed last year, virtually wiping out foreign markets farmers had spent years cultivating.

Trump has previously accused Beijing of backsliding on promises to increase purchases of US farm goods and has offered billions in aid to farms badly damaged in the trade war.

Senior US and Chinese officials are due to hold preliminary talks later this month, in preparation for meetings in early October led by Mnuchin and US Trade Representative Bob Lighthizer.

Mnuchin said "we clearly didn't make the progress we wanted to" at the last meeting in Shanghai in late July, but he added: "I'm cautiously optimistic. I take the Chinese in good faith that they want to come here with a deal now."

But he said Trump "is prepared to keep these tariffs in place. He's prepared to raise tariffs if we need to raise tariffs."

Declining to comment on the specifics of the negotiations, Mnuchin pointed to a previous agreement nearly signed earlier in the year in which the United States' top concerns were "intellectual property, forced joint ventures and making sure that we have a level playing field on trade."

However the matter of Hong Kong's pro-democracy movement "is definitely not on the table," he said. "That is an issue for the secretary of state to deal with."

Hong Kong's Chief Executive, Carrie Lam, warned the United States on Tuesday not to "interfere" with her government's response.

Reducing America's soaring trade deficit with China has long been a principal aim in Trump's trade battle with Beijing, which he also accuses of stealing American technology and unfairly intervening in markets.

In 2018, the US goods trade deficit with China was US$419.52 billion.

Trump has long viewed deficits as a defeat for the United States, arguing that they amount to stealing. These assertions are rejected by most economists.

Meanwhile the US president maintains that the protracted trade war is damaging China more than the United States, and China is "eating the tariffs."

But experts have warned there are signs the US is also feeling the pinch, with job creation slowing across major industries last month. (AFP)