Treasury Secretary Mnuchin says China trade talks are done for the day

Key Points
  • U.S. trade talks with China end for the day, and Treasury Secretary Steven Mnuchin calls the discussions "constructive." 
  • China's top trade negotiator, Vice Premier Liu He, left morning discussions and shook hands with Mnuchin and U.S. Trade Representative Robert Lighthizer. 
  • The world's two largest economies hope to salvage a trade deal after the U.S. hiked tariffs on $200 billion in Chinese goods. 
Mnuchin: US-China trade talks 'constructive'

U.S. trade talks with China ended Friday as Liu He, the top Chinese trade negotiator, left the Office of the U.S. Trade Representative.

"They were constructive discussions between both parties, that's all we're going to say. Thank you," Treasury Secretary Steven Mnuchin told CNBC after Liu's departure. Both Mnuchin and U.S. Trade Representative Robert Lighthizer shook hands with Liu, who is China's vice premier, as he left the office in Washington.

The two Trump administration officials were seen entering the White House after the two days of U.S.-China talks ended.

The world's two largest economies engaged in negotiations on Thursday and Friday as they tried to salvage a trade deal that appeared to be within their grasp only a week ago. The U.S. increased tariffs on $200 billion in Chinese goods to 25% from 10% on Friday following what it called China's decision to back out of key commitments to a developing agreement. China has promised to retaliate against the tariffs, but it is unclear what action Beijing would take.

Chinese Vice Premier Liu He talks with U.S. Treasury Secretary Steven Mnuchin and Trade Representative Robert Lighthizer as he leaves trade talks in Washington, May 10, 2019.
Leah Millis | Reuters

Investors have watched the talks closely. Major U.S. stock indexes dove Friday after the duties went into effect and President Donald Trump said "there is absolutely no need to rush" to strike a deal.

The U.S. aims to address grievances including intellectual property theft, forced technology transfers and its trade deficits with Beijing. Trump hopes tariffs will force Beijing to sign a deal. But as the trade war widens, it risks damaging the global economy and alienating key voters ahead of Trump's 2020 releection bid.

Trump dug in and defended his tariff policy on Friday morning before the day's talks started.

"Tariffs will make our Country MUCH STRONGER, not weaker," the president tweeted. "Just sit back and watch! In the meantime, China should not renegotiate deals with the U.S. at the last minute."

It is unclear when Washington and Beijing will start talks about a trade deal again. Trump could put even more pressure on China to agree to terms.

The president has threatened to put 25% tariffs on the $325 billion in Chinese goods that remain untaxed.

Investors see the potential for the U.S. and China to reach a deal before the tariffs start hitting companies' bottom lines. The duties do not apply to goods shipped before May 10. That creates a possible period of up to a few weeks for the sides to possibly avoid escalation.

— CNBC's Stephanie Dhue contributed to this report.

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