DAVOS: US Treasury Secretary Steven Mnuchin said on Friday that he expects to begin negotiations with China on a so-called Phase 2 trade deal soon, with Washington and Beijing on the same page.

“My guess is they (China) will consider waiving other tariffs as part of their purchasing program,” Mnuchin said of the $200 billion in additional US goods and services that China has pledged to buy.

“I don’t see any difference in our views. My expectation is that we’ll start conversations on phase two in the near future,” he said in an interview at the end of the annual meeting of the World Economic Forum (WEF) in the Swiss ski resort of Davos.

China had a low-key presence at the Davos meeting, with most of the focus on trade concentrated on a dispute between the United States and the European Union over a “digital tax”, with Washington threatening retaliation if the bloc’s members tax US based companies before an apparent compromise was reached.

“Once there is a consensus, those tax changes need to be implemented and in many places, require legislation. We object to a tax that targets just American companies,” Mnuchin said. With chief executives representing many of the biggest companies from around the world at Davos, it is often used as a barometer of business confidence and the economic outlook.

“It seems like Europe and Asia has bottomed and the US still looks in very good shape. So there are a lot of positive attitudes,” Mnuchin said, with US tax cuts in prospect.

“My expectation is that the focus of tax cuts will be for the middle class and some pro-growth incentives,” he added.

The biggest battleground during the four-day event has been the debate over how politicians and business leaders should tackle climate change, with much of the focus on exchanges between US President Donald Trump and activist Greta Thunberg.

This year’s WEF included a contingent of young activists like Thunberg, with the organisers keen to add to the voices engaging in debate at the exclusive event.

“I was at dinner last night and people were very focused on the climate issue. My comment was, look we’re in the middle of a serious health issue in China. It was not a topic of discussion until I brought it up,” Mnuchin said.

Published in Dawn, January 25th, 2020