The President of United States (U.S.) – Donald Trump has announced that he would extend the March 1, 2019 deadline of increasing tariff from 10% to 25% on Chinese imports worth U.S. $ 200 billion.
The decision was made following substantial progress made during the talks held between Washington and a team led by the Vice Premier of China – Liu He. The discussions included topics like intellectual property protection, technology transfers, agriculture, services and currency.
Speaking on tariffs, Trump tweeted, “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. As a result of these very productive talks, I will be delaying the U.S. increase in tariffs now scheduled for March 1. Assuming both sides make additional progress, we will be planning a Summit for President Xi and myself, at Mar-a-Lago, to conclude an agreement. A very good weekend for U.S. & China!”
Trump is also looking to hold a summit with the President of China – Xi Jinping, at his Florida-based Mar-a-Lago estate to sign a deal between U.S. and China.
Post trump’s announcement, markets in Asia rose on Monday morning, February 25, 2019. The Shanghai composite jumped 3.32% while the Shenzhen component gained 4.250%. Hong Kong’s the Hang Seng index rose 0.24% as shares of China Construction Bank gained 1%. Besides, the shares of Hong Kong-listed Chinese firm ZTE jumped more than 6.4%. Japan’s Nikkei 225 moved 0.52% and the Topix rose 0.68%.
A former assistant U.S. Trade Representative (USTR) – Hun Quach said, “We commend the President’s decision to delay the tariff increase on thousands of everyday products that millions of American families want and need. These ongoing negotiations have been hanging over America’s retailers causing uncertainty throughout our supply chain.”
For the records, the Chinese economy grew 6.6% in 2018, its slowest pace since 1990. The major factor causing the slowdown of economic is the deadline of increasing tariff on Chinese imports by the U.S., which now stands extended.