China returns the favour by delaying tariffs on U.S. goods after Trump signed the interim trade agreement
The People’s Republic of China has officially announced today, i.e., Sunday, December 15, 2019 that it will not impose new tariffs on a new set of United States (U.S.) goods worth U.S. $ 75 billion.
It has also said that ongoing trade negotiations between China and the U.S. must go-ahead on the basis of mutual respect and equality. The announcement came after the President of U.S. – Donald Trump signed an interim agreement for the first phase of trade deal on December 13, 2019.
The now delayed tariffs, which were to be imposed by China would have ranged between 5-10% on U.S. cars and parts of the cars.
A statement from the Customs Tariff Commission of the State Council, China read, “China hoped it could continue to work with the US on the basis of equality and mutual respect to address the concerns of both parties and promote the steady development of the China-US trade relations.”
As per the interim agreement, the new tariffs of 15%, which were to be imposed by U.S. on fresh set of Chinese goods worth U.S. $ 160 billion from December 15, 2019, have now been delayed. Besides, there is relaxation on current tariffs as well. In exchange, China has promised to purchase more agricultural products from U.S. in tune of U.S. $ 50 billion.
The interim deal also covers issues of intellectual property, technology transfers, the opening up of China’s financial services markets and Beijing’s commitment to buy more American agricultural and other goods.
Speaking on the occasion, the Vice Minister of Commerce in China – Wang Shouwen said that thought the deal has been signed, it is yet to go final legal checks.
Separately, Trump is looking forward to phase 2 of the deal and wants to close it on priority basis.
Taking it to twitter, Trump tweeted, “We have agreed to a very large Phase One Deal with China. They have agreed to many structural changes and massive purchases of Agricultural Product, Energy, and Manufactured Goods, plus much more. The 25% Tariffs will remain as is, with 7 1/2% put on much of the remainder.”
We have agreed to a very large Phase One Deal with China. They have agreed to many structural changes and massive purchases of Agricultural Product, Energy, and Manufactured Goods, plus much more. The 25% Tariffs will remain as is, with 7 1/2% put on much of the remainder….
— Donald J. Trump (@realDonaldTrump) December 13, 2019
He further tweeted, “The Penalty Tariffs set for December 15th will not be charged because of the fact that we made the deal. We will begin negotiations on the Phase Two Deal immediately, rather than waiting until after the 2020 Election. This is an amazing deal for all. Thank you!”
…..The Penalty Tariffs set for December 15th will not be charged because of the fact that we made the deal. We will begin negotiations on the Phase Two Deal immediately, rather than waiting until after the 2020 Election. This is an amazing deal for all. Thank you!
— Donald J. Trump (@realDonaldTrump) December 13, 2019
Besides, speaking at a Forum in Doha, the U.S. Secretary for Treasury – Steven Mnuchin said, “For a very long time the US was open to China, China was not open to the US. There were very strong restrictions and for the first- and second-largest economies in the world, there should be more trading back and forth and that’s what we’ve been working on. I think these agreements will not only be good for the US but will be very good for global growth.”
For the records, Trump’s move gains significance as U.S. is getting ready for Presidential polls in 2020 and Trump is leaving no stone unturned to highlight the achievements of his Government. Striking a deal with China and ending the trade war would be a major boost to his election campaign.
