The Trump administration will postpone its planned five per cent tariff increase on $US250 billion ($A364 billion) worth of Chinese goods by two weeks as a gesture of goodwill toward Beijing on the 70th anniversary of the founding of the people’s republic.
President Donald Trump on Wednesday took to Twitter to announce that the hike from 25 to 30 per cent in duties on certain Chinese imports would take effect on October 15 instead of October 1, as had been previously scheduled.
“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, we have agreed, as a gesture of good will, to move the increased Tariffs on 250 Billion Dollars worth of goods (25 per cent to 30 per cent), from October 1st to October 15th,” Trump wrote.
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….
— Donald J. Trump (@realDonaldTrump) September 11, 2019
The US stock market’s futures shot up immediately after the tweets, with Dow Jones Industrial Average futures up about 150 points following Trump’s announcement.
By mid-October, the US and China will have already held their 13th round of trade negotiations, which are slated for the beginning of the month.
On September 1, the latest episode in the ongoing trade war between the two superpowers saw the US implement a 5 per cent tariff increase – from 10 to 15 per cent – on Chinese imports worth $US112 billion.
Also, Washington is set to raise to 15 per cent the duties on the remaining goods from China that are still taxed at 10 per cent, reaching $US300 billion worth of Chinese products in total, on December 15.
In reaction to the US’ move, China slapped its own tariffs of between 5 and 10 per cent on American products valued at $US75 billion.
Trump warned after these measures took effect that if he won re-election in 2020, he would be “much tougher” when it came to negotiating a trade deal.
The US president’s objective has long been to even out the trade balance between the world’s two largest economies, but his tariff increases have had little to no effect so far in this regard.
The geopolitical rivals’ ongoing trade dispute is creating global consequences that go far beyond their bilateral relations.
In July, the International Monetary Fund revised its latest forecast on global economic growth for the year downwards to 3.2 per cent, 0.1 per cent lower that it had predicted in April, due to the planet-wide economic ripples generated by the trade war.