US to delay China tariff increase as trade war softens amid ‘productive’ talks
In a thawing of relations, the US will delay raising tariffs on Chinese goods after “substantial progress” in trade talks.
Hopes for a breakthrough in the trade war between the US and China have soared after Donald Trump said he would extend the deadline for increasing tariffs and would hold a summit on the issue with China’s president Xi Jinping.
The move came after days of tense negotiations in Washington between US and China trade delegations, with Mr Trump describing the outcome today as ‘very productive.’
“I am pleased to report that the US has made substantial progress in our trade talks with China on important structural issues including intellectual property protection, technology transfer, agriculture, services, currency and many other issues,” Mr Trump tweeted.
“As a result of these very productive talks I will be delaying the US increase in tariffs now scheduled for March 1.’
The president said he would be planning a summit with Mr Xi at his Florida resort of Mar-a-Lago where the two leaders have previously met.
“A very good weekend for US & China,” Mr Trump tweeted.
I am pleased to report that the U.S. has made substantial progress in our trade talks with China on important structural issues including intellectual property protection, technology transfer, agriculture, services, currency, and many other issues. As a result of these very......
— Donald J. Trump (@realDonaldTrump) February 24, 2019
....productive talks, I will be delaying the U.S. increase in tariffs now scheduled for March 1. Assuming both sides make additional progress, we will be planning a Summit for President Xi and myself, at Mar-a-Lago, to conclude an agreement. A very good weekend for U.S. & China!
— Donald J. Trump (@realDonaldTrump) February 24, 2019
His decision to delay the deadline for raising tariffs is the most concrete sign yet that the complex and difficult negotiations between the two countries have made genuine advances. It will be welcomed in Canberra where there has been growing concern about the fall-out of the US-China trade war on the Australian economy.
However the US and China have not signed any binding resolutions yet on a solution, leaving that for Mr Trump and Mr Xi to resolve at their summit which is expected to be held next month (March).
Mr Trump had threatened to lift tariffs on $US200 billion of Chinese imports from 10 to 25 per cent from March 1 unless there was a breakthrough in talks.
The US wants China to purchase many billions of dollars more in US goods to reduce the yawning trade deficit between the two countries which last year reached $US382 billion.
The US and its allies like Australia wants Washington to strike a resolution that helps all countries by forcing structural changes in China to increase global access to Chinese markets and to reduce its unfair trading practices.
The administration has been pushing for China to change its requirement that US companies hand over intellectual property and technology as a condition of doing business in China.
The US-China trade conflict has rattled global markets amid warnings that it will slow growth in both China and the US, with flow-on effects across the globe.
But China has so far refused to offer significant structural concessions although it has offered to purchase more US goods.
Chinese and US trade negotiators have not divulged what tentative agreements they have come to after the talks in Washington.
Mr Trump at the weekend retweeted a media report that China has proposed it could buy an extra $US30 billion a year of US agricultural products including soybeans, corn and wheat as part of a possible trade deal.
China is also reported to have pledged that it will not artificially weaken the value of its government-controlled currency to reduce the impact of US tariffs.
Talks between Chinese and US trade delegations in Washington are extended through the weekend in the hope of a breakthrough. Mr Trump’s critics fear that he may settle for a deal that reduces the US deficit with China — an election promise he made during the 2016 campaign — without forcing Beijing to address longer-term changes to the way it trades and does business with the world.
— Cameron Stewart is also US Contributor for Sky News Australia
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