US open to facing penalties in China trade deal, says Steven Mnuchin

The United States (US) is open to facing “repercussions” if it doesn’t live up to its commitments in a potential trade deal with China, Treasury Secretary Steven Mnuchin said, in a sign that the two sides are edging closer to an accord.

“There are certain commitments that the US  is making in this agreement, and there are certain commitments that China is making,” Mnuchin told reporters on Saturday at the IMF meetings in Washington. “I would expect that the enforcement mechanism works in both directions, that we expect to honor our commitments, and if we don’t, there should be certain repercussions, and the same way in the other direction,” he said.

Mnuchin said the countries are making progress in talks to end their nine-month trade war, which has cast a cloud over global growth and financial markets. Under the pact being discussed, the US and China would each establish an “enforcement office” to monitor compliance, he said.