While markets rose following the news of the truce, and major Wall Street economists called the Argentina meeting a positive development, many doubt that China will make the broad concessions the U.S. seeks. Mnuchin suggested that some of the longstanding disputes with China could get resolved “in the short term,” but others will take longer to settle.
The White House has threatened to raise a 10 percent tariff on $200 billion in Chinese goods to 25 percent, as originally planned, if the two sides fail to reach a deal within 90 days. The Treasury secretary told CNBC that the U.S. “absolutely” needs to see “something concrete over these 90 days.”
The China talks alone appear to be a big lift for Trump’s team. But the White House will attempt to ram the United States Mexico Canada Agreement — which tweaks NAFTA, which went into effect nearly 25 years ago — through Congress as Democrats prepare to take control of the House next month.
Nancy Pelosi, the Democratic frontrunner to become the next House speaker, called the trade deal a “work in progress” last week as she pushed for more labor and environmental protections. Even Republicans in the GOP-controlled Senate, such as Rob Portman of Ohio and Marco Rubio of Florida, have pushed for changes to the agreement.
Trump’s threat Saturday to scrap NAFTA — an apparent move to pressure lawmakers to support his new deal — only complicates the tricky process. Sen. Sherrod Brown, an Ohio Democrat who often aligns with Trump on trade, called the threat “not particularly helpful,” according to the Washington Post.
Trump administration officials have shrugged off the prospect of the USMCA deal failing in Congress. As he signed the deal with Canada and Mexico’s leaders on Friday, Trump said he does not “expect to have very much of a problem” getting the legislature to approve it.
Mnuchin also showed optimism Friday about the prospect of Congress signing off on the trade agreement.
Trade is not the only core issue on which Trump will face difficult talks in the coming weeks. He is also pushing for Congress to approve $5 billion to build his proposed border wall, which Democrats have pledged not to do. The physical barrier was one of his most repeated campaign promises.
Congress faces a Friday deadline to pass a spending bill or see parts of the government shut down. Lawmakers appear set to pass only a short-term spending bill this week as the death of the President George H.W. Bush has turned Washington’s focus away from the talks. That will only delay the possible showdown between Trump and Democrats.
Trump on Monday again threatened to shut down the “entire” southern U.S. border “if necessary,” another move that would disrupt trade with a major partner.
Subscribe to CNBC on YouTube.