Trump Postpones Tariff Hike in Goodwill Gesture After Request From China’s Vice Premier
President Donald Trump announced he was postponing a new hike in tariffs originally scheduled to take effect next month as a goodwill gesture to China.
“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 percent to 30 percent), from October 1st to October 15th,” Trump announced on Twitter on Sept. 11.
….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% to 30%), from October 1st to October 15th.
— Donald J. Trump (@realDonaldTrump) September 11, 2019
The postponement came after Trump applauded a decision by China earlier in the day to wave import tariffs on 16 types of U.S. products, including anti-cancer drugs and lubricants.
Chinese trade deputies are expected to meet with their U.S. counterparts in Washington in mid-September before minister-level meetings in early October involving He, U.S. Trade Representative Robert Lighthizer, and Treasury Secretary Steven Mnuchin.
In Asia, the local stock markets responded positively to Trump’s announcement in the early hours of trading. At the time of writing, Japan’s Nikkei stock index was up 0.89 percent, South Korea’s benchmark Kospi was up 0.84 percent, and the weighted index on the Taiwan Stock Exchange edged up 0.58 percent.
In China, the Shanghai Composite Index increased slightly by 0.12 percent.
Last March, a Section 301 investigation conducted by the U.S. Trade Representative’s Office (USTR) concluded that Beijing was engaging in state-sponsored intellectual property theft and other unfair trade practices, prompting the Trump administration to announce punitive tariffs on imports from China, precipitating the current trade war.
Recently, 15 percent tariffs on $112 billion worth of Chinese imports went into effect on Sept. 1, covering goods such as clothes, chocolate, diapers, shoes. Another round of 15 percent tariffs are scheduled to take effect on Dec. 15. If fully imposed, those tariffs would mean that virtually all imports from China—worth about $550 billion—would be subject to punitive U.S. tariffs.
“Trump’s comments are likely to put a little juice in the market, but it could be gone tomorrow,” said Hugh Dive, chief investment officer at Atlas Funds Management in Sydney, according to Reuters.
“Some in the market react to small changes in negotiating positions because Trump is negotiating in the open. I’m more concerned about Brexit, because there is some complacency in the EU about this,” Dive added.
Reuters contributed to this report.