Trump Delays Planned Tariff Increase in ‘Gesture of Goodwill’ to China


WASHINGTON — President Trump said Wednesday night that the United States would delay its next planned tariff increase on China by two weeks, as “a gesture of goodwill” that may help to mend the seriously damaged ties between the world’s two biggest economies.

The United States would delay a planned increase in its 25 percent tariff on $250 billion of Chinese goods from Oct. 1 to Oct. 15, a move that was made “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,” the president said in a tweet.

The move comes as trade talks between the United States and China have stagnated, leading to stock market volatility and consternation among businesses that have paid higher prices to import and export goods. Despite months of talks, negotiators still appear far from a comprehensive trade deal that would resolve the Trump administration’s concerns about Chinese economic practices, including its infringement on American intellectual property.

The president’s announcement will delay talks by only two weeks. But it could allow negotiators to meet ahead of the next round of tariffs, raising the potential for that increase to be averted.

The two sides were on the cusp of a trade deal this spring, when Chinese leaders decided that some American demands to change their laws infringed too much on Chinese sovereignty. Since then, Mr. Trump has moved ahead with taxing an additional $112 billion of Chinese products, and he was expected to raise tariffs even further on Oct. 1. China imposed additional tariffs on $75 billion worth of American goods in retaliation.

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. On Wednesday, China published a short list of American products that would be exempt from its new tariffs, and said it would announce more exemptions in coming weeks. The exemptions included cancer drugs and certain chemicals that China does not produce domestically, but it did not include American exports like pork and soybeans, which have been targeted by Beijing as punishment for Mr. Trump’s tariffs.

In remarks in the Oval Office on Wednesday, Mr. Trump greeted the exemptions as a sign that China would soon compromise, saying that the trade war “was only going to get worse” and “they want to make a deal.”

“They took tariffs off, certain types,” he said. “I think it was a gesture. It was a big move. People were shocked. I wasn’t shocked.”

On other fronts, the Trump administration continues to move ahead with more stringent treatment of China. The administration has drafted an executive order that would increase inspections of mailed packages, in an effort to crack down on shipments of counterfeit goods and deadly drugs from foreign nations including China.

Business leaders say they are already struggling under the tariffs, and predict lower profits and wage cuts if further levies — more are set for December — go into place. A poll by the American Chamber of Commerce in Shanghai published Wednesday said the trade war was weighing on its members’ projections for revenue growth, optimism about the future and future investment plans. Moody’s Analytics estimates that the trade war has already cost 300,000 American jobs, a toll that could increase to nearly 450,000 by the end of this year and nearly 900,000 jobs by the end of next year, assuming Mr. Trump’s planned tariff increases go into effect.

In recent months, some of the focus has shifted away from the terms of the trade deal itself to whether there can be an interim agreement that would involve Chinese purchases of American agricultural products and smooth over relations between the countries.

Chinese officials and their contacts have floated the idea of restarting agricultural purchases, in return for the United States postponing further tariff increases and offering some relief for Huawei, the Chinese telecom giant that has been blacklisted from buying American products, several people familiar with the matter said.

Mr. Trump has been deeply frustrated by China’s refusal to purchase American agricultural products in recent months. The move would help the president by buoying a constituency that is important for him politically and also increasingly opposed to the trade war.

But such an interim agreement has also proved elusive. The president and his advisers are increasingly aware of the national security risk posed by Huawei, and cognizant that they would face criticism from Democrats and Republicans alike if they relent. Companies have submitted more than 120 applications to the Commerce Department to supply certain nonsensitive products to Huawei, but no applications have yet been approved.

American officials may consider removing some tariffs in return for economic concessions from China, but they are unlikely to do so for agricultural purchases, Mr. Trump’s allies say.

The Chinese, meanwhile, know that agricultural purchases would reduce the political pressure on Mr. Trump and potentially increase his chances of re-election, and they are not likely to trade away this source of leverage easily, people familiar with their thinking said.

At a Senate hearing Tuesday, Treasury Secretary Steven Mnuchin said the two countries were discussing soybean purchases, but pushed back on suggestions that the United States would be easily bought off.

“I’ve been accused at times of just wanting to sell soybeans. That’s not what we’re trying to do,” Mr. Mnuchin told lawmakers in the hearing. “We want to make sure that China treats our farmers fairly and doesn’t retaliate against the farmers in an unfair way.”

“As part of any discussion, we are talking about ag purchases,” he told reporters after the hearing. “That’s very important to us, defending our farmers.”



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