WASHINGTON – United States President Donald Trump said on Wednesday his administration was postponing the planned 5-percent tariff increase on $250 billion worth of Chinese goods by two weeks as a gesture of goodwill toward Beijing on the 70th anniversary of the founding of the people’s republic.
Trump took to his favorite medium, the social media platform Twitter, to announce that the hike from 25 to 30 percent in duties on certain Chinese imports would take effect on Oct. 15 instead of Oct. 1, as had been previously scheduled.
“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 wrote.
The US stock market’s futures shot up immediately after the tweets, with Dow Jones Industrial Average futures up about 150 points following Trump’s announcement.
By mid-October, the US and China will have already held their 13th round of trade negotiations, which are slated for the beginning of the month.
On Sept. 1, the latest episode in the ongoing trade war between the two superpowers saw the US implement a 5-percent tariff increase – from 10 to 15 percent – on Chinese imports worth $112 billion.
Also, Washington is set to raise to 15 percent the duties on the remaining goods from China that are still taxed at 10 percent, reaching $300 billion worth of Chinese products in total, next Dec. 15.
In reaction to the US’ move, China slapped its own tariffs of between 5 and 10 percent on American products valued at $75 billion.
Trump warned after these measures took effect that if he won re-election in 2020, he would be “much tougher” when it came to negotiating a trade deal and claimed that “in the meantime, China’s supply chain will crumble.”
The US president’s objective has long been to even out the trade balance between the world’s two largest economies – in which China has had the upper hand for many years – but his tariff increases have had little to no effect so far in this regard.
The geopolitical rivals’ ongoing trade dispute is creating global consequences that go far beyond their bilateral relations.
In July, the International Monetary Fund revised its latest forecast on global economic growth for the year downwards to 3.2 percent, 0.1 percent lower that it had predicted in April, due to the planet-wide economic ripples generated by the trade war.