After an apparent conciliatory move by China, US President Donald Trump on Wednesday made one of his own, announcing that he had agreed to delay an increase in tariffs on US$250 billion of Chinese goods by two weeks.
Speaking weeks ahead of the resumption of talks aimed at resolving a grinding trade dispute, Trump said that the tariff delay was requested by Beijing.
Top negotiators expect to reconvene in Washington early next month after an acrimonious summer in which trade relations deteriorated sharply and both governments announced waves of new tariffs in a standoff that is dragging on the global economy.
Photo: AFP
“We have agreed, as a gesture of good will [sic], to move the increased Tariffs on 250 Billion Dollars worth of goods (25% to 30%), from October 1st to October 15th,” Trump tweeted late on Wednesday.
Trump said that the delay was requested by “Vice Premier of China, Liu He [劉鶴], and due to the fact that the People’s Republic of China will be celebrating their 70th Anniversary,” on Oct. 1.
Beijing earlier on Wednesday announced that it was temporarily exempting some US exports from tariff increases, a gesture that lifted equity markets long buffeted by the ups and downs in the conflict now entering its second year.
“It was a big move,” Trump told reporters at the White House.
He reiterated that Beijing was under pressure to strike a bargain as its economy weakens, which he attributed to US action.
However, the goods exempted do not include high-profile agricultural items such as soybeans and pork that could be crucial to the ultimate success of any agreement.
The exemptions are to become effective on Tuesday next week and be valid for a year, said China’s Customs Tariff Commission of the State Council, which released two lists that included seafood products and anti-cancer drugs.
The lists mark the first time Beijing has announced products to be excluded from its tariffs.
Other categories that are to be spared included alfalfa pellets and fish feed, and the commission said it was also considering further exemptions.
Both sides imposed fresh tit-for-tat tariffs on Sept. 1, adding to the duties that now cover hundreds of billions of US dollars of goods.
Trump initiated the dispute after complaining that China engaged in unfair trade practices.
“These adjustments signal that China is more willing to make progress in the October trade talks, likely toward striking a ‘narrow’ agreement that involves China buying more US goods in exchange for the US suspending further tariff hikes,” Barclays analysts said in a research note.
They said Beijing had been sounding a more “constructive” note over trade relations, but US businesses in China are increasingly pessimistic about their prospects.
A report released on Wednesday said that a growing number of US companies expect their revenue and investment in China to shrink.
The American Chamber of Commerce in Shanghai’s report said that 47 percent of the companies surveyed said that they expected to increase their investments in China this year, down from 62 percent last year.
Three-quarters of businesses surveyed said that they opposed the use of punitive tariffs by the US to force China into a trade deal.
China’s economy grew 6.2 percent year-on-year in the second quarter, the lowest rate in nearly three decades — a fact that Trump highlighted.
Auto sales in China fell by 6.9 percent last month compared with the previous year, official industry association data released on Wednesday showd, extending a slump.
Trump has said that the protracted trade dispute is damaging China more than the US, and China is “eating the tariffs,” but experts have warned there are signs that the US is also feeling the pinch, with job creation slowing across major industries last month.
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