Trump delays tariff hike by two weeks as goodwill

Packets of American soya beans at a soya bean exhibition in Shanghai last year. China is considering whether to allow renewed imports of soya beans, pork and other American agricultural products. PHOTO: ASSOCIATED PRESS
Packets of American soya beans at a soya bean exhibition in Shanghai last year. China is considering whether to allow renewed imports of soya beans, pork and other American agricultural products. PHOTO: ASSOCIATED PRESS
Packets of American soya beans at a soya bean exhibition in Shanghai last year. China is considering whether to allow renewed imports of soya beans, pork and other American agricultural products. PHOTO: ASSOCIATED PRESS
U.S. PRESIDENT DONALD TRUMP.

Move gives negotiators breathing room ahead of next month's US-China trade talks

The trade war has shown signs of a detente as the United States and China took steps to ease tensions with goodwill gestures that also benefited businesses and consumers battered by months of tariffs.

US President Donald Trump announced on Wednesday that he was delaying a tariff hike by two weeks "as a gesture of goodwill to China".

China is also considering whether to allow renewed imports of soya beans, pork and other American agricultural products, reported Bloomberg.

Chinese Commerce Ministry spokesman Gao Feng told a regular news briefing yesterday that China welcomed the US postponement of the tariff increase as a goodwill gesture.

Possible Chinese purchases of US farm goods included pork and soya beans, he added.

Chinese imports of farm products stopped last month after trade talks broke down, devastating American farmers who count China as their biggest export market.

The Trump administration is bailing out farmers - many of whom helped elect him in 2016 and whose support he needs next year - with two aid packages to the tune of US$28 billion (S$38.5 billion).

 
 
 
 

The US was to have raised tariffs on US$250 billion of Chinese goods from the existing 25 per cent rate to 30 per cent on Oct 1. It will now go ahead on Oct 15.

The delay was made at the request of Chinese Vice-Premier Liu He because the 70th anniversary of the founding of the People's Republic of China is on Oct 1 - the original date of the tariff hike, Mr Trump said on Twitter.

The postponement follows China's announcement a day earlier that 16 American products will be exempted from tariffs, including anti-cancer drugs and ingredients for animal feed.

Analysts saw Beijing's move as an attempt to ease the burden of the trade war on Chinese businesses and consumers, as well as an olive branch to Washington.

Mr Trump took the former view, saying on Twitter on Wednesday morning that China was being hit hard by the tariffs, adding: "Supply chains breaking up as many companies move, or look to move, to other countries. Much more expensive to China than originally thought."

He later said in the Oval Office that the tariff exemptions were a "gesture". "It was a big move. People were shocked. I wasn't shocked. But I deal with them, and I know them and I like them. And I hope we can do something," he said.

Mr Trump announced the tariff hike - from 25 per cent to 30 per cent - on Aug 23 in response to China's counter-tariffs on US$75 billion of US imports.

He also said that a further US$300 billion of Chinese imports would be subject to a new tariff of 15 per cent, up from the originally planned 10 per cent rate.

That set of tariffs was eventually split into two tranches, with the first going ahead on Sept 1. The second tranche is planned for Dec 15.

Talks are due next month, so the two-week delay means that negotiations could take place ahead of the hike, and potentially forestall it.

Mr Gao said yesterday that American and Chinese working-level teams will meet soon to prepare for the next round of talks, adding that both sides were communicating, but he did not give a date for the meeting between the top negotiators.

 
A version of this article appeared in the print edition of The Straits Times on September 13, 2019, with the headline 'Trump delays tariff hike by two weeks as goodwill'. Print Edition | Subscribe