Donald Trump delays US tariff rate increase to avoid escalating trade tension on China’s National Day
- Rise in tariff rate on US$250 billion worth of Chinese imports to 30 per cent moved from October 1 to October 15
- Delay comes the day after China exempted 16 types of US products, including medications, from import tariffs
US President Donald Trump said on Wednesday that he will delay a planned increase in tariffs on Chinese goods at the request of Vice-Premier Liu He to avoid escalating trade tensions on China’s National Day.
The new 30 per cent tariff rate on US$250 billion worth of imports from China, from the existing 25 per cent rate, had been moved from October 1 to October 15 in recognition of the 70th anniversary of the founding of the People’s Republic of China, which falls on the earlier date, Trump said in a Twitter post.
While the specific date of the talks has not been released, they are expected to take place before October 15, leaving room for a further postponement or even a cancelling of some tariffs if the talks in Washington produce a ceasefire.
“I think they did the right thing. I think it was good for them,” Trump told White House reporters earlier on Wednesday, referring to China’s exemptions. “But they took them off, yeah I think it was a gesture, OK. But it was a big move. People were shocked. I wasn’t shocked.”
The exemption announced by China will take effect on Tuesday and remain in place until September 16, 2020, the Customs Tariff Commission of the State Council said in a statement a day before Trump’s latest move. A number of medicines and insecticides are included on the list of temporarily exempted US products, while some others will be eligible for refunds on tariffs already paid.
It is the first time that China has granted tariff waivers to US products since the trade war broke out between the world’s two biggest economies a year ago, reflecting a softened stance from Beijing.
The Global Times, a tabloid newspaper affiliated with the Communist Party’s mouthpiece Peop le’s Daily, said in an editorial on Wednesday evening that the trade war had already done too much damage and that it was time to put an end to it as both sides “are getting clear of each other’s bottom lines”.
“There’s no meaning to continue [the trade war],” the newspaper wrote. “At this moment, China is willing to work with the US seriously to seek a final solution to end the trade war.”
Economists at Barclays, led by Chang Jian, said there had been an “adjustment” from Beijing’s side as China’s stance had softened compared with its previous approach from May to August.
“China is more willing to make progress in the October trade talks” and to strike a narrow deal that would involve China buying more US goods in exchange for the US suspending tariffs, the economists wrote.
Additional reporting by Wendy Wu
