The United States sent China a letter last week, asking to cut the tariff on U.S. automobiles, buy more U.S.-made semiconductors and give U.S. firms better access to the Chinese financial sector.

Treasury Secretary Steven Mnuchin and U.S. Trade Representative Robert Lighthizer listed steps that Washington wants Beijing to take in a letter to Liu He, a newly appointed vice premier who oversees China’s economy.

The Chinese newspaper, The Journal, reported that Mnuchin was considering a visit to Beijing to pursue negotiations.

Mnuchin said he’s optimistic the U.S. would reach an agreement with China that will stop U.S. President Donald Trump to impose tariffs on at least $50 billion of goods from the country.

Alarm over a possible trade war between the world's two largest economies has chilled financial markets as investors anticipate dire consequences should trade barriers go up due to President Trump's bid to cut the U.S. deficit with China by $100 billion.

Automobiles and Semiconductors

Mnuchin said the two countries agree on reducing the deficit to some degree and are trying to “to see if we can reach an agreement as to what fair trade is for them to open up their markets, reduce the tariffs, stop forced technology transfer.”

As mentioned above, both Mnuchin and Lighthizer listed specific requests and steps for China in a letter to Liu.

The list includes a reduction of Chinese tariffs on U.S. automobiles, more Chinese purchases of U.S. semiconductors and better access to China’s financial sector by American companies.

The U.S. will proceed with tariffs “unless we have an acceptable agreement that the president signs off on,” Mnuchin said Sunday.

“We’re not afraid of a trade war, but that’s not our objective,” he said. “In a negotiation, you have to be prepared to take action.”

Fears of a trade war mounted earlier this month after Trump first slapped tariffs on steel and aluminum imports, and then on Thursday specifically targeted China by announcing plans for tariffs on up to $60 billion of Chinese goods.

On Friday, China fired a warning shot in response to the U.S. tariffs on steel and aluminum by declaring plans to levy additional duties on up to $3 billion of U.S. imports.

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