Mnuchin: China Deal's Phase Two Will Ease U.S. Tariffs

The next phase of a trade deal with Beijing will ease U.S. tariffs on goods from China, even if future agreements are split up into several rounds, Treasury Secretary Steven Mnuchin said Wednesday.

“Just as in this deal there were certain rollbacks, in phase two there will be additional rollbacks,” Mnuichin told CNBC's "Squawk Box." “It’s really just a question of — and we’ve said before — phase two may be 2A, 2B, 2C. The first step is really focusing on enforcement, but this gives China a big incentive to get back to the table and agree to the additional issues that are still unresolved."

Late Tuesday, Mnuchin said U.S. tariffs on Chinese goods will remain in place until the second phase of a U.S.-China trade agreement is completed.

Negotiators on Wednesday are to sign the phase one deal, which will include an agreement by China to buy $200 billion in U.S. goods over the next two years while addressing U.S. concerns that companies are forced to share technology in exchange for access to China's markets, a claim the Chinese government denies.

Mnuchin said the forced technology transfers and intellectual property theft issues should be fixed by the first phase deal.

"And China has agreed to put together very significant laws to change rules and regulations and have made very strong commitments to our companies that there will not be forced technology going forward," Mnuchin said.

The deal also will tackle the use of pharmaceutical-related intellectual property, as well as the ability for U.S. financial companies to access China's markets, but Mnuchin said the deal is a "very big win" for U.S. businesses, technology companies, and American workers.

If the stipulations in phase one are not met, President Donald Trump can return to putting tariffs on China's imports, or to raise tariffs, said Mnuchin.

Meanwhile, the secretary said he does not see Chinese telecommunications giant Huawei as a "chess piece" in the negotiations for phase 2 of the deal, as it is not part of the "economic dialogue."

"When it comes to military networks and networks of all our allies, we want to make sure that the networks are fully secure," said Mnuchin.