US Treasury secretary remains concerned about weak China currency

Trump Chinese lived too well for too long

Reuters Liau Chung-ren

China's record high surplus with the U.S. could add to tensions in the trade relationship between the world's two largest economies.

"The currency report is something we report to Congress".

The US recently imposed tariffs on $200 billion worth of Chinese exports, prompting Beijing to counter with its own tariffs on $60 billion worth of US products.

Imports grew 14.3 percent, slightly missing forecasts, customs data showed Friday.

"If the U.S. sold four Ford-class aircraft carriers priced at $15bn (£11.4bn) each, it would easily make up for the $60bn trade deficit with China", said the editorial in The People's Daily, a Chinese state media outlet and Communist party mouthpiece. In the past two years, China has failed on only one criteria, its high trade surplus with the United States.

The meeting was said to have been pushed by U.S. Treasury Secretary Steven Mnuchin and White House economic adviser Larry Kudlow.

China's exports to the United States rose to $46.7 billion while imports slumped to $12.6 billion.

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The IMF has also lowered estimates for the United States and the global economy as a whole.

"That would be very costly for them", Mnuchin said. "It has to be that we can reach an agreement on action items that can rebalance the relationship".

Mnuchin said in the discussions he had with the Chinese they had made clear that they did not see a further weakening of the Chinese yuan as being in their interests.

"They lived too well for too long", Trump said of the Chinese during his Fox News interview.

- China said Friday it is in contact with the United States amid reports of a planned meeting between President Xi Jinping and President Donald Trump next month following a dive in the USA stock market blamed partly on a growing trade war between the world's two largest economies. That would approach the $1.2 trillion U.S. -Canada-Mexico trade under the North American Free Trade Agreement.

"The president has been clear", Mnuchin said in an interview with CNBC.

Yet the prospects remain highly uncertain as to whether the U.S.is preparing to consider lifting penalty tariffs on about $250 billion of Chinese products, triggering retaliation by China. "I would expect China to understand that". "Markets tend to go too far in both directions and they have natural corrections". "I can't say 100 per cent certainty, but there is no question everybody is looking at it". "And frankly, I guess, they think that the Americans are stupid people".

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