Treasury Secretary Steven Mnuchin says the U.S. is making progress in talks with Canada and Mexico over steel tariffs, potentially overcoming a key hurdle toward approval of a trade agreement between the three countries.
Appearing before a Senate Appropriations subcommittee Wednesday, Mnuchin also said he expects to soon travel to Beijing with U.S. Trade Representative Robert Lighthizer to resume negotiations on the trade dispute between the U.S. and China.
The positive comments on trade from Mnuchin helped turn losses on Wall Street into gains by midday. Investors were also buoyed by reports that President Donald Trump plans to delay a decision about imposing tariffs on autos from Europe by up to six months. A decision was due by this Saturday.
The multipronged battle over trade being waged by the Trump administration has some stock market analysts, and economists worried that extra costs and disruptions to supply chains could slow consumer spending, hurt corporate profits and slow down the U.S. economy, which grew at a 3.2% pace in the first quarter. Trump says past trade deals were tilted against the U.S. and that competitors such as China and even allies in Europe have taken advantage of the U.S. when it comes to trade.
The U.S. has negotiated a trade deal with Mexico and Canada to replace NAFTA. But some U.S. lawmakers say they won’t vote to approve the accord unless the U.S. lifts tariffs on steel from the two countries put in place last year.
“I think we are close to an understanding with Mexico and Canada,” Mnuchin said.
On China, Mnuchin reiterated the administration’s stance that the two countries were recently close to a deal but things went “in a different direction,” resulting in the two countries increasing tariffs on each other’s goods and wrapping up talks in Washington without an agreement.
Trade tensions between the U.S. and EU have been running high since Trump slapped tariffs on European steel and aluminum imports last year.