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Mnuchin says phase two of China trade deal may come in stages: ‘We’ll see’

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Secretary of the Treasury Steven Mnuchin answers questions from the press after an interview on CNBC on the North Lawn of the White House in Washington, September 12, 2019. REUTERS/Sarah Silbiger.

Sarah Silbiger | Reuters

The next phase of a trade deal between the U.S. and China could come in stages and is yet to be determined, according to U.S. Treasury Secretary Steven Mnuchin.

Washington and Beijing announced on Friday that an agreement on phase one had been reached, pending legal procedures, an accord Mnuchin called “historic.”

Phase one includes agreements on technology transfer, intellectual property, agricultural purchases, financial services access and currency conduct.

“We are going to go into a very short period of time of having the translation scrubbed, the deal will be signed in early January and then we will start on phase two,” Mnuchin told CNBC’s Hadley Gamble at the Doha Forum on Saturday.

“Phase two may be 2a, 2b, 2c, we’ll see, but this is unto itself a huge accomplishment for the president,” he added.

President Donald Trump said Friday that the U.S. would begin negotiations on the next phase of the trade deal “immediately, rather than waiting until after the 2020 Election.”

The first phase will see the U.S. delay additional 15% tariffs on $160 billion worth of Chinese imports and to refrain from imposing new duties for as long as negotiations continue amicably, while Beijing has agreed to significantly increase American agricultural purchases.

In tweets, Trump said the White House would leave 25% tariffs on $250 billion in imports in place while cutting existing duties on another $120 billion in products to 7.5%.

Global markets rallied on Friday in reaction to the news, having been largely beholden to the bruising trade war between the world’s two-largest economies over the past 18 months.

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Australian retailers suffer worst quarter in 20 years, exports shine

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Shoppers walk past a retail store in Australia.

Brendon Thorne | Getty Images

Australia’s retailers are facing a consumption drought as the country’s second biggest state locks down to fight the coronavirus and as data showed sales volumes suffered their biggest plunge in two decades in the second quarter.

Retail sales adjusted for inflation slipped 3.4% in the June quarter, Tuesday’s data from the Australian Bureau of Statistics showed, the steepest decline since the introduction of the goods and services tax in 2000. Analysts were expecting a 3.2% fall in the quarter.

The larger-than-expected drop suggests consumer spending will be a drag on gross domestic product growth in the June quarter.

The sales downturn was driven by cafes & restaurants, off 29.1%, and clothing, footwear and personal accessory, down 22%. There were also losses in food retailing.

The slump in volumes contrasts with value-based retail numbers, with June seeing a solid 2.7% jump in monthly sales and May recording a stellar 16.9% rise as shops, restaurants and pubs fully reopened across large parts of Australia.

Economists warned the outlook was clouded by a second wave of coronavirus infections in the state of Victoria, with weekly spending data by the country’s major banks already showing signs of moderation.

Victoria declared a “state of disaster” this week following a relentless surge in coronavirus infections since late June.

In contrast to retailers, Australia’s exporters have been going gangbusters thanks to demand from China for iron ore and other resources, while imports have been hammered by the lockdowns.

Separate data on Tuesday showed the trade surplus swelled to A$8.2 billion in June, taking the total for the second quarter to a whopping A$23.4 billion.

Exports rose 3% in June underpinned in part by sharply rising prices for iron ore and gold, providing a windfall to miners’ earnings and government tax receipts.

Exports to China alone hit an historic high of A$14.6 billion for the month, bringing the rolling 12-month total to A$151 billion.

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New Delhi cannot fully cut off economic ties with Beijing

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India China tensions: New Delhi cannot fully cut off economic ties with Beijing