Ceasefire In Trade War? Trump Delays 25 Per Cent Tax Imposition On Chinese Imports Worth $200 Billion Citing Progress In Trade Talks

US President Donald Trump on Sunday (24 February) said that he would delay the application of tariffs on Chinese goods set to take effect at the end of this week, citing “substantial progress” in talks in Washington with a team led by China’s Vice-Premier Liu He, The Wall Street Journal reported.

A hike in tariffs from 10 to 25 per cent on $200 billion worth of Chinese imports was supposed to take effect on 2 March.

“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,” Trump tweeted.

Trump also tweeted that should progress continue, the US would plan a summit with President Xi Jinping of China to “conclude an agreement” that would settle a yearlong trade fight between the two nations.

In a reconciliatory move, Chinese interlocutors have offered Washington an increase in purchases of US farm and energy products and services, ease restrictions on US firms in financial services and auto manufacturing, and improve protection of US intellectual-property rights.

According to China’s state news agency Xinhua, substantial progress was achieved during the 21-24 February trade talks in Washington (the seventh round since February last year), on specific issues such as technology transfer, protection of intellectual property rights, non-tariff barriers, service industry, agriculture and exchange rates. The two sides further implemented the important consensus reached by Chinese President Xi Jinping and his US counterpart Trump, during their December meeting in Argentina, said the Chinese delegation.

The Chinese team was headed by Vice Premier Liu He, who also came as Xi's special envoy, and the US team was led by Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin.

The US had imposed tariffs on $34 billion worth of Chinese imports that came in to force in last July. In August, it announced that it will impose a 25 per cent tariff on another $16 billion worth of Chinese goods.

In September, Trump fired yet another salvo in the ongoing confrontation over trade with China by announcing a fresh set of tariffs on imports of Chinese products to the US. The 10 per cent tax on about $200 billion worth of Chinese imports was to come into effect on 24 September and a steeper rate of 25 per cent was supposed to be imposed at the end of 2018. The tariffs were targeted at a vast swathe of goods ranging from luggage to seafood.

Major indexes in Asia rose on Monday morning following signs of progress in trade talks.

Japan’s Nikkei 225 index opened up 0.7 per cent higher on Monday, while the Korea’s Composite Stock Price Index opened 0.5 per cent higher. The offshore yuan gained as much as 150 pips to 6.6876 against the US dollar in the early morning session.