Trump delays tariff hikes on Chinese goods ahead of talks

Evarado Alatorre
Setiembre 13, 2019

If the USA proceeds with its threat to impose tariffs on an additional $300billion (R4 trillion) worth of Chinese goods, it could lead to a global recession in as little as nine months - that is, according to the chief economist at Morgan Stanley, Chetan Ahya. It's a sign they might step up purchases of American agricultural products, a possible goodwill gesture ahead of talks next month aimed at ending the tariff war.

United States president Donald Trump has agreed to a two-week delay in a planned increase in tariffs on some Chinese imports.

Donald Trump has said the planned increase in China tariffs next month has been delayed two weeks as a "as a gesture of good will".

Chinese Vice Premier Liu He on Thursday met with Chairman of the U.S.

"It should be seen as a goodwill gesture the USA side made for creating good vibes for the trade talks scheduled in early October", said Hu, who is believed to have sources high in the Chinese government.

The gestures Wednesday and Thursday appear meant to reduce tension ahead of the talks.

Asian stocks rose on Thursday, while China's yuan currency was also up 0.27 percent in offshore trade, as investors hoped for a thaw in U.S.

"If we can get the right deal, we'll do a deal".

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In a tweet, Mr Trump said a 5% increase to duties scheduled for 1 October will be postponed for two weeks.

"The exemption could be seen as a gesture of sincerity towards the U.S. ahead of negotiations in October but is probably more a means of supporting the economy", ING's China economist Iris Pang wrote in a note.

Private buyers from China have started making price inquiries for USA soybean cargoes in November and December, according to people with knowledge of the matter. The United States, Europe, Japan and other trading partners charge that Beijing has resorted to predatory tactics as part of the campaign, including stealing trade secrets and forcing foreign firms to hand over technology to gain access to the Chinese market.

The two countries appeared to be nearing a deal in early May. USA soybean sales to China in 2018 dropped 74% from the previous year to a 16-year low. "I take the Chinese in good faith that they want to come here with a deal now".

There are also concerns about ongoing unrest in Hong Kong and the influence of China in the group, the Financial Times reported.

And US Treasury Secretary Steven Mnuchin sought to temper any optimism, saying that Trump was prepared to keep or even raise tariffs on Chinese imports and that Beijing had asked for more concessions beyond the removal of tariffs.

The Chinese exemptions apply to raw materials needed by farmers and factories.

Significant US exports to China, like pork, soybeans and American-made cars, are among the goods that will still be hit by the hefty taxes.

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