Topline: Donald Trump has delayed a 5% tariff hike on $250 billion worth of Chinese imports by two weeks as a “gesture of goodwill” in a move that has been welcomed by markets and hints trade tensions could be cooling.
Trump tweeted that the latest round of tariffs would be delayed following a request from the Chinese government. The tariffs had been due to kick in on the same day that China will be holding a public holiday to mark the 70th anniversary of its communist party seizing power.
It followed China’s decision to exempt 16 U.S. goods from increased duties, including cancer medicines and animal feed, but the move excludes other key exports such as American cars and agricultural goods. Trump welcomed the move as “the right thing.” The concessions hint Washington and Beijing could be softening their stances ahead of talks in October aimed at resolving the trade war.
The U.S. last month announced it would increase duties on the $250 billion worth of Chinese imports last month from 25% to 30%.
Meetings between both sides will take place in a matter of weeks, with Treasury Secretary Stephen Mnuchin and trade representative Robert Lighthizer due to meet China’s vice premier Liu He in October.
Key background: The two countries have been engaged in a tit-for-tat tariff battle for more than a year, with tensions gradually spilling out and triggering fears of a global recession. But after a period of silence, both sides appear willing to try to resolve the conflict but finding a long-term fix for Beijing’s complaints about Trump’s protectionist stance and U.S. grumbles over alleged intellectual property and technology thefts by Chinese firms could be tough.
If a deal can’t be struck another round of tariffs are due in December.