The flood of optimism welling-up in the Trump administration over ongoing U.S.-China trade talks continues with Treasury secretary Steve Mnuchin claiming both sides have reached agreement on the contentious enforcement mechanism.

“We’ve pretty much agreed on an enforcement mechanism,” alleges Mnuchin. “We’ve agreed that both sides will establish enforcement offices that will deal with the ongoing matters. This is something both sides are taking very seriously.”

He also claims the meeting with Chinese Vice Premier Liu He on Tuesday was “productive.”

“We went into late last night, and we have another call scheduled for tomorrow morning ... we still have some important issues to address, but both sides are working very hard on this agreement,” according to Mnuchin.

Mnuchin and U.S. Trade Representative Robert Lighthizer are leading negotiations with Chinese representatives to craft a long-term trade deal with China.

He also claims both countries continue to make progress on a trade deal, including resolving the enforcement mechanism, a key sticking point that’s been holding-up progress since the start of negotiations.

Mnuchin said the administration is really focused on the execution of the documents. He declined to reveal more details about this enforcement mechanism, however.

Mnuchin pushed back against president Donald Trump’s claim the talks will wrap-up in the next four weeks. He said there isn’t a specific timeline.

“We are hopeful we can do this quickly, but we are not going to set an arbitrary deadline,” said Mnuchin. “If we can complete this agreement, this will be the most significant changes to the economic relationship between the U.S. and China in really the last 40 years.

“The opening of the Chinese economy will be a tremendous opportunity with structural changes that will benefit U.S. workers and U.S. companies.”

Updates of progress in the talks have been reported by different sources. Last week, Myron Brilliant, executive vice president for international affairs of the United States Chamber of Commerce (USCC) said the U.S. and China had reached agreement on 90 percent of the issues being tackled at the ongoing trade talks. USCC is the largest lobbying group in the U.S.

Steven Mnuchin
U.S. Secretary of Treasury Steven Mnuchin testifies during a House Financial Services Committee hearing on Capitol Hill in Washington, DC., Feb. 6, 2018. Getty

Brilliant, however, admitted both sides have yet to make any progress on the remaining 10 percent. Among these intractable issues is that Washington hasn’t acceded to Beijing’s demands it remove existing U.S. tariffs on Chinese goods. On the other hand, China hasn’t agreed to the terms of an enforcement and implementation mechanism ensuring China will honor the deal.

Also last week, Mark Zandi, Moody’s Analytics Chief Economist, said it is “highly likely” the world will enter into an economic recession if the U.S. and China don’t reach a trade deal before July.

“Business sentiment across the globe is extraordinarily fragile,” said Zandi.