China welcomes delay in US tariff increase

'No longer appropriate' to raise rates because of progress in trade talks since last Dec: US

The Chinese and US national flags seen before the start of a conference in Beijing, on Jan 30, 2019. PHOTO: AFP

SHANGHAI/WASHINGTON • China has welcomed the release of language from the United States Trade Representative's office (USTR) delaying a scheduled hike in US tariffs on US$200 billion (S$271 billion) worth of Chinese goods.

In a statement posted yesterday on the website of the Ministry of Commerce, citing an unidentified official at the Chinese government's State Council Tariff Commission, China said it was aware of the USTR's announcement to maintain tariffs at 10 per cent until further notice, and welcomed the step.

The USTR's notice on the delay in a scheduled hike in tariffs on Chinese goods from 10 per cent to 25 per cent came on Friday, as trade talks between the two sides had made progress.

The notice, due to be published in the Federal Register on Tuesday, says it is "no longer appropriate" to raise the rates because of progress in negotiations since December last year.

The tariffs would remain "at 10 per cent until further notice".

Several hours later, President Donald Trump tweeted that he had asked China to immediately remove all tariffs on US agricultural products because trade talks were progressing well.

"I have asked China to immediately remove all Tariffs on our agricultural products (including beef, pork, etc) based on the fact that we are moving along nicely with Trade discussions," Mr Trump said on Twitter, pointing out that he had not raised tariffs on Chinese goods to 25 per cent from 10 per cent on March 1 as planned.

"This is very important for our great farmers - and me!" Mr Trump tweeted.

Farmers are a key constituency for Mr Trump's Republican Party, and the US President's trade war with China has had a heavy impact on them.

Beijing imposed tariffs last year on the imports of soya beans, grain sorghum, pork and other items, slashing shipments of American farm products to China.

US Agriculture Secretary Sonny Perdue said last week that US trade negotiators had asked China to reduce tariffs on US ethanol, but it was not immediately clear whether Beijing was willing to oblige.

At a briefing in Beijing yesterday, a Chinese government official, Mr Guo Weimin, said both countries were working on the next steps to resolve their trade spat, though he gave no details.

Meanwhile, the Trump administration filed another salvo at the World Trade Organisation (WTO) on Friday, saying US trade policy was not going to be dictated by the international body and defending its use of tariffs to pressure China and other trade partners.

China has challenged the Trump administration's tariffs in the WTO, arguing that they violate its agreed rules. The case is likely to be ultimately decided by the WTO's Appellate Body, the world's top trade court.

A report drawn up by the USTR outlining the White House's trade agenda for this year says the US will continue to use the Switzerland-based WTO to challenge what it sees as unfair practices.

However, the report adds: "The United States remains an independent nation, and our trade policy will be made here - not in Geneva. We will not allow the WTO Appellate Body and dispute settlement system to force the United States into a straitjacket of obligations to which we never agreed."

The report was published a day after a WTO adjudication panel handed Washington a major victory over Beijing, ruling that China's domestic price supports for wheat and rice constituted an excessive subsidy and violated WTO obligations.


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A version of this article appeared in the print edition of The Sunday Times on March 03, 2019, with the headline China welcomes delay in US tariff increase. Subscribe