USA – China Trade War: Trump postpones 5% extra tariff by two weeks as a gesture of goodwill

01/Sep

President Donald Trump announced on Wednesday, 11^th September that he will postpone the imposition of 5% extra tariffs on Chinese goods by two weeks. This move has brightened the backdrop for upcoming negotiations.

On Wednesday, China announced a range of 16 US goods (including some anti-cancer drugs and lubricants, as well as animal feed ingredients whey and fish meal) to be exempted from 25 per cent extra tariffs enacted last year. While this may create some good will in Washington, China is keeping the pressure on US agricultural exports like soy beans produced in key Trump-supporting states.

Post China’s announcement, Donald Trump twitted on the same day “At the request of the Vice Premier of China, Liu He, and due to the fact that the People’s Republic of China will be celebrating their 70th Anniversary on October 1st, we have agreed, as a gesture of good will, to move the increased tariffs on 250 Billion Dollars’ worth of goods (25 per cent to 30 per cent), from October 1^st to October 15^th. The concessions came days before of a planned meeting which aimed at defusing the escalation of trade war between the world's two largest economies.

Trump escalated the US-China trade war in August when he announced an increase in the levy on $250 billion of Chinese goods to 30 per cent, from 25 per cent, starting October 1. Further increases are planned for December.

Tensions between the two sides have eased slightly in recent weeks, with Chinese officials agreeing to travel to the United States in October for the next round of talks. Negotiators will be meeting in Washington to endeavour and clinch the trade war, which is causing increasing economic damage. There is little sign that substantive progress is being made on the two countries differences, while Trump still has further tariff increases lined up.