After an apparent conciliatory move by
China, US President Donald Trump on Wednesday made one of his own,
announcing that he agreed to delay an increase in tariffs on $250
billion worth of Chinese goods by two weeks.
Speaking weeks ahead of the resumption of talks aimed at resolving a
grinding trade war, Trump said 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 stand-off that is
dragging on the global economy.
"We have agreed, as a gesture of good will, to move the increased
Tariffs on 250 Billion Dollars worth of goods (25% to 30%), from October
1st to October 15th," Trump tweeted late Wednesday.
He said the delay was requested by "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 1.
Early Wednesday, Beijing announced 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 actions.
However, the goods exempted do not include high-profile agricultural
items like soybeans and pork that could be crucial to the ultimate
success of any agreement.
The exemptions will become effective on September 17 and be valid for a
year, according to the Customs Tariff Commission of the State Council,
which released two lists that include seafood products and anti-cancer
drugs.
The lists mark the first time Beijing has announced products to be excluded from tariffs.
Other categories that will be spared include alfalfa pellets and fish
feed, and the commission said it was also considering further
exemptions.
Both sides imposed fresh tit-for-tat tariffs on September 1, adding to
the duties that now cover hundreds of billions of dollars' worth of
goods.
Trump initiated the trade war 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 in recent weeks over trade relations.
- Growing pressure -
But US businesses in China are increasingly pessimistic about their prospects.
A report released Wednesday said growing numbers of companies expect
their revenues and investment in the local market to shrink.
The American Chamber of Commerce in Shanghai's report said 47 percent
surveyed said they expected to increase their investments in China in
2019, down from 62 percent last year.
Three-quarters of businesses surveyed said they opposed the use of
punitive tariffs by the United States to force China into a trade deal.
China's economy grew 6.2 percent on-year in the second quarter, the
lowest rate in nearly three decades -- a fact Trump highlighted on
Wednesday.
Auto sales in China fell by 6.9 percent in August compared with the
previous year, an official industry association said Wednesday,
extending a slump.
Trump has said the protracted trade war is damaging China more than the United States, and China is "eating the tariffs."
But experts have warned there are signs the US is also feeling the
pinch, with job creation slowing across major industries last month.
Wall Street added to gains after Trump spoke, reflecting renewed hope an agreement could be reached to end the trade war.
The benchmark Dow Jones Industrial Average jumped 0.9 percent to close at 27,137.04.
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