Friday, 20 September, 2019

Donald Trump pushes back increase in Chinese import tariffs

Trump US will delay some US tariffs on Chinese goods China scraps some US tariffs ahead of trade talks
Deanna Wagner | 13 September, 2019, 16:32

The world's largest economies have been locked in a bruising trade fight for the past year that has hurt businesses and weighed on the global economy.

China on Wednesday said it would spare some U.S. products from punitive new tariffs, an apparent olive branch ahead of high-level talks next month to resolve the two nations' protracted trade war.

If Trump thought it was a brilliant idea to ban Chinese technology giant Huawei, it will force China to establish new production, supply and value chains that exclude the US. "I think it was a gesture, OK, I think it was a good move".

"It was a big move". He said that starting on October 1st, the $250 billion of goods and products from China, now being taxed at 25%, will be taxed at 30%.

When those talks fell apart in May the two sides were circulating a 150-page draft agreement and White House officials have repeatedly said they were 90% of the way to securing a deal. "We'll see what happens".

More than 300,000 American jobs have been lost as a result of President Donald Trump's trade war with China, and another 600,000 could be destroyed if the conflict drags on for another year.

Mnuchin said "we clearly didn't make the progress we wanted to" at the last meeting in Shanghai in late July, but he added: "I'm cautiously optimistic". Exact dates for the meetings have not been released.

"The exemption could be seen as a gesture of sincerity towards the US ahead of negotiations in October but is probably more a means of supporting the economy", ING's Greater China economist Iris Pang wrote in a note.

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The second list includes four items that will enjoy the exemption but are not eligible for tariff refunds.

So far, the United States has imposed tariffs on more than $360bn (£296bn) of Chinese goods, and China has retaliated with tariffs on more than $110bn of USA products. Before that, Beijing had given the go-ahead for five companies to buy up to 3 million tons of USA soybeans free of retaliatory import tariffs, people familiar with the situation had said. China was their biggest market before Beijing responded to USA tariffs by imposing taxes on soybeans from the United States. The United States is by far China's largest supplier of whey, which is an important ingredient in piglet feed and hard to source in large volumes from elsewhere.

Taken together, the measures pale in comparison to the oncoming hit from USA tariff increases still in the pipeline for October and December, the fruit of a rapid escalation in tensions between the two sides last month.

China will exempt some U.S. agricultural imports, such as pork and soybeans, from additional tariffs, according to Chinese state news agency Xinhua. Those target farm states that supported Trump in the 2016 presidential election.

Chinese state news agency Xinhua announced the policy change on Friday, saying "there are broad prospects for importing high-quality agricultural products from the United States".

15 from October 1.

The exemption will take effect on September 17 and be valid for a year through to September 16, 2020, it said. The two sides came close to a deal in May, but Chinese officials balked at requirements that Chinese laws be altered as part of the deal. Prices had jumped 3.3% on Thursday and hog futures rose the most allowed by the exchange amid optimism that China will boost imports of American farm products in a bid to ease trade tensions.