EghtesadOnline: International Monetary Fund Managing Director Christine Lagarde said on Monday she expects the United States and China to reach a deal to end their trade dispute, which has unnerved financial markets and cast a shadow over the global economy.
“I would say ‘Yes,’” Lagarde said at the Milken Institute Global Conference when asked whether talks between the world’s two largest economies would end in a deal.
Washington and Beijing have been engaged for the past year in a trade war marked by tariffs on billions of dollars in goods and threats of escalation. The talks are now at a critical point, Reuters reported.
US Treasury Secretary Steven Mnuchin was scheduled to speak at the conference on Monday but was headed to China instead for talks, according to Financial Tribune.
Lagarde was the first speaker at the annual conference, which draws 4,000 attendees including some of the world’s most powerful thinkers and trendsetters to discuss finance, healthcare and other topics.
Later on Monday, Blackstone Group LP Chief Executive Stephen Schwarzman also said he was positive about the prospects for a US-China deal, but cautioned it would not solve all the issues being disputed.
“I’m positive that they will come up with something that works, but it will not be a trade deal that solves all problems for all people,” he said.
Lagarde said in an interview she did not see the US economy dipping into a recession, following last week’s news that it grew at a stronger-than-expected 3.2% annualized pace in the first three months of 2019.
Concerns have been mounting over a global slowdown, particularly in China and Europe, and the prospect that the decade-long US bull market might be coming to an end.
But the strong US GDP growth data may prompt leaders to reassess the health of the economy, she said. Lagarde cautioned, however, that more data was necessary before making a more definite call.
Even as inflation has been largely in check, a situation she called “highly mysterious,” Lagarde said she expected price pressures to pick up “gradually and slowly” in the coming months, in part fueled by rising oil prices.
Asked if she would like to continue as IMF managing director after her current term ends in 2021, Lagarde said, “I’m looking at my options.” The former French politician was named IMF chief in 2011.
US Treasury Secretary Steven Mnuchin said on Tuesday that he hopes to make “substantial progress” with Chinese negotiators in the next two rounds of trade talks, as the world’s two largest economies look for ways to end their bruising trade war.
Mnuchin was speaking in Beijing, where he and US Trade Representative Robert Lighthizer will hold talks this week, before Chinese Vice Premier Liu He goes to Washington next week for another round of talks, in what could be the end game for negotiations.
“We’ve a meeting here, and then the vice premier and team will be coming back to Washington D.C., and we hope to make substantial progress in these two meetings,” Mnuchin told reporters.
Beijing and Washington have cited progress on issues including intellectual property and forced technology transfer to help end a conflict marked by tit-for-tat tariffs that have cost both sides billions of dollars, disrupted supply chains and roiled financial markets.
“I’m not going to comment on specific issues of the discussions,” Mnuchin said on Tuesday. “They’ve been quite broad as I’ve said before. We’ve made a lot of progress. We look forward to the meetings here.”
US President Donald Trump said on April 4 that the two sides could have a deal worked out in about four weeks. Last week, he said he would soon host Chinese President Xi Jinping at the White House - a meeting seen as needed to cement an agreement.
Mnuchin, speaking to Fox Business Network in an interview that aired on Monday, said the trade negotiations aimed at enforcement is close to finished.
China’s foreign ministry said on Tuesday at its daily press briefing that substantive progress had been made on the talks but gave no details.