US Treasury Secretary Steven Mnuchin says the trade war with China will benefit, not hinder, allies (Goh Chai Hin)

Nusa Dua (Indonesia) (AFP) – US Treasury Secretary Steven Mnuchin pushed back Saturday against warnings that Washington’s trade fight with China imperils the world economy, saying that pushing Beijing to open up will be good for all.

The IMF has warned this week at annual meetings in Bali that the escalating US-China trade confrontation would hobble global economic growth, as the fund lowered its forecasts for this year and next.

But Mnuchin told reporters on the Indonesian resort island that President Donald Trump’s drive to punish China with tariffs to encourage it to adopt fairer trade practices would have the opposite affect.

“Our objective with China is very clear: it’s to have a more balanced trading relationship,” Mnuchin said.

“I think that if we are successful, this is very good for US companies, US workers, Europeans, Japan, all of our other allies, and good for China.”

Mnuchin said, however that the IMF’s warnings were “all the more reason for China to be incented to address these issues with us”.

The IMF Tuesday cut its outlook for global GDP growth by 0.2 percentage points to 3.7 percent for 2018 and 2019, saying that “everyone is going to suffer” from a clash between the world’s two biggest economies.

Tensions have soared in recent months with Donald Trump’s administration rolling out billions of dollars in tariffs against China in a bid to tackle its trade deficit and rein in what Washington views as unacceptable trade practices by the Asian giant.

“Our objective is to increase exports and have a more balanced, fair relationship where our companies can do business there on terms that are similar to how they can do business (in the US),” Mnuchin said.

“(A) free fair and reciprocal relationship.”

Attention has begun to turn toward hopes that Trump and Chinese President Xi Jinping could meet on the sidelines of the G-20 summit next month in Argentina and bury the hatchet with some sort of agreement.

“I don’t think any decision has been made in regards to a meeting,” Mnuchin said.

“To the extent that we can make progress toward a meeting, I would encourage that and that’s something we are having discussions about.

“But for the moment, there’s no preconditions. The president will decide on that.”

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