'We've stopped negotiating'

American officials have repeatedly claimed that action was in response to China attempting to renegotiate parts of a deal it had previously agreed to — which Beijing has denied — and the prospect of additional tariffs on that $325 billion worth of Chinese products has hung over the bilateral relationship for the last month. "We made enormous progress, I think we had a deal that was almost 90% done. China wanted to go backwards on certain things," Mnuchin said. "We've stopped negotiating." Where the countries go from here, according to the Treasury secretary, is up to Trump to decide when he and Xi meet in Osaka, Japan at the end of June. "In the case of Buenos Aires, we came out of that, we had direction from the two presidents, (Trump) put the increases on hold. The president will make a decision after the meeting," Mnuchin said. "I believe if China is willing to move forward on the terms that we were discussing, we'll have an agreement. If they're not, we will proceed with tariffs," he added.

The thorny issues

Mnuchin weighed in on several of the thorniest subjects thought to be separating the American and Chinese sides from a deal. For one, he said that the issue of removing China's so-called non-tariff barriers to foreign companies succeeding within its borders remains central to the U.S. position on the talks. "In negotiating our agreement, one of the big parts of the agreement has always been about non-tariff barriers, is about forced technology transfer. These are very important issues to us, and critical to any agreement," Mnuchin said. "These are issues where we've made a lot of progress, and any agreement we have, we'll need to be certain that that's included."

U.S. President Donald Trump walks with Treasury Secretary Steven Mnuchin in Washington, U.S., April 21, 2017. Kevin Lamarque | Reuters

American officials and businesses have long argued that China's official and unofficial rules put non-Chinese firms at a disadvantage in the country. One of the most frequently cited examples is a "forced tech transfer" regime — in which companies are coerced into sharing their advanced technology and know-how with Chinese organizations in exchange for market access. Trump has also suggested that he may want his negotiating teams to pick up the issue of China's currency, but Mnuchin on Sunday dismissed the notion that Beijing is actively keeping the yuan low in an effort to win a trade advantage over the likes of the U.S. Instead, he said, any weakness now seen in the Chinese currency is the result of downward economic pressures — in part due to Trump's tariffs on the country. "I do think their currency has been under pressure," the Treasury secretary said. "There's no question that, as we put on tariffs, people will move their manufacturing outside of China, into other areas, and that's going to have a very negative impact on their economy. And I think you see that reflected in the currency."

Another topic that has raised tensions between Beijing and Washington is Chinese telecommunications giant Huawei. The U.S. government has cracked down on the tech firm, effectively blacklisting it from doing business with American businesses, on the basis of claims it is a security risk. The rationale, according to the Trump administration is that the firm's involvement in sensitive networking technology could potentially be leveraged by Beijing for spying or other malicious actions. Both China and the company have denied such a risk exists. Mnuchin emphasized that the Huawei blacklisting is solely a national security issue, and isn't a non-tariff front of the trade war — even though Trump has suggested that the telecom company could get wrapped into a wider deal. "They're separate from trade: Both we and China have acknowledged that in our discussions," he said. "Now, of course, President Trump, when he has the meeting, to the extent he gets certain comfort on Huawei or other issues, obviously we can talk about national security issues, but these are separate issues, they're not being linked to trade."

He emphasized the U.S. claim — central to recruiting allies in its effort to control the spread of Huawei tech — that Trump's prior comments do not reveal an effort to gain trade leverage over Beijing: "I think what the president is saying is, if we move forward on trade, that perhaps he'll be willing to do certain things on Huawei if he gets comfort from China on that, and certain guarantees."

The next meeting