By Josh Zumbrun 

Treasury Secretary Steven Mnuchin said the Trump administration won't apply tariffs on Chinese imports to the U.S. while the two countries hammer out details of a deal to reduce the yawning U.S. merchandise trade deficit with China.

"We're putting the trade war on hold," Mr. Mnuchin said in an interview on Fox News Sunday, while the two countries "try to execute the framework" of a deal to reduce the U.S.'s $375 billion annual trade surplus with China.

During bilateral trade talks held in Washington late last week, the U.S. had demanded China reduce its trade advantage by $200 billion or more. China came to the talks ready to step up purchases of U.S. goods, but refused to agree to a specific dollar amount.

The talks followed U.S. threats to apply tariffs on as much as $150 billion worth of Chinese imports. The procedural steps to apply tariffs on the first $50 billion tranche of Chinese imports would have been completed next week.

Over the weekend, the two sides released a joint statement after concluding the talks. The statement failed to mention any specific numerical target for reduction in the U.S. deficit, as the U.S. had wanted.

"Both sides agreed on meaningful increases in United States agriculture and energy exports," the statement said, adding that "the delegations also discussed expanding trade in manufactured goods and services. There was consensus on the need to create favorable conditions to increase trade in these areas."

Mr. Mnuchin said the two sides are working on a deal that would "substantially" reduce the U.S. trade deficit with China, and that Commerce Secretary Wilbur Ross would travel to China to seek "very hard commitments" that would include substantial increases in Chinese purchases of U.S. agriculture and energy output.

Mr. Mnuchin played down the significance of the Chinese not agreeing to reduce the deficit by $200 billion, saying that the transactions play out company-by-company, not through a single government purchasing decision, and that "ultimately this is about industry being able to have hard contracts and deliver these goods."

Liu He, the Chinese vice premier, led Beijing's delegation to Washington this week to try to end the escalating trade tensions between the two nations. Mr. Liu also touted the progress over the weekend, saying that "both sides agreed to avert a trade war and to stop imposing tariffs on each other," the official Xinhua News Agency reported.

Mr. Liu's visit to Washington followed a trip to Beijing earlier this month by Mr. Mnuchin and other top U.S. trade officials.

Lawrence Kudlow, the head of the White House National Economic Council, said that President Donald Trump has been pleased with the direction of negotiations.

"We will have come a long way and the president who started out skeptically on our trade mission is now very much behind it," Mr. Kudlow said in an interview on ABC.

And yet, the weekend deal with China still leaves a complex trade agenda up in the air. The two sides have been negotiating over a deal for the U.S. to ease restrictions on China's ZTE Corp., the telecom company that has raised fears that its technology could be used to spy on Americans via their phones.

ZTE was also found by the U.S. government of having violated sanctions against North Korea and Iran, and the Commerce Department has forbid U.S. companies from supplying parts to ZTE pending an official review. Officials have sent mixed messages over whether ZTE is part of the larger trade deal. President Trump has tweeted on the issue, noting this issue has come up in discussions with Chinese Premiere Xi Jinping. In his interview Sunday morning, Mr. Mnuchin said of ZTE: "This is an enforcement issue, not a trade issue."

While a deal to at least delay tariffs with China has been reached, the European Union is still facing the threat of U.S. steel and aluminum tariffs going into effect at the end of the month.

This week, the administration also missed a deadline from Speaker of the House Paul Ryan, who had said that if a new deal on the North American Free Trade Agreement wasn't reached by last Thursday, Congress might not have time to approve the deal this year. U.S. trade representative Robert Lighthizer said that day that Washington is "nowhere near close to a deal" with its partners in Canada and Mexico.

"The President is more determined to have a good deal than he's worried about any deadlines," said Mr. Mnuchin, regarding Nafta. The sides are "far apart, but our objective is still to get a deal."

Write to Josh Zumbrun at Josh.Zumbrun@wsj.com

(END) Dow Jones Newswires

May 20, 2018 12:33 ET (16:33 GMT)