WASHINGTON — President Donald Trump on Wednesday said he was postponing the imposition of 5% extra tariffs on Chinese goods by two weeks, a move that delays the next escalation of the trade war and brightens the backdrop for upcoming trade negotiations.
“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% to 30%), from October 1st to October 15th,” Trump wrote on Twitter.
S&P 500 futures climbed 0.5% and the offshore yuan strengthened 0.3% against the dollar. The yen fell.
Negotiators from the two countries are due to meet in Washington in the coming weeks to push forward talks to end the trade war that’s stretching into its second year, causing increasing economic damage. At the same time there’s little sign that substantive progress is being made on their differences, while Trump still has further tariff increases lined up.
On Wednesday, China announced a range of U.S. goods to be exempted from 25% extra tariffs put in place last year, as the government seeks to ease the impact from the trade war. While that move may create some good will in Washington, China is keeping the pressure on U.S. agricultural exports like soybeans produced in key Trump-supporting states.
Trump escalated the U.S.-China trade war in August when he announced an increase in the levy, already in effect, on $250 billion in Chinese goods to 30% from 25% starting Oct. 1. Further increases are planned for December.