The tariff increases for Chinese imports that were scheduled to be implemented on October 1 is now being delayed by two weeks, in what President Donald Trump is calling “a gesture of good will.” The announcement made via Twitter came on the heels of Chinese officials granting a one-year exemption on retaliatory tariffs on 16 American products. President Trump noted that the change in timing is in response to a request from Vice Premier of China, Liu He, who cited the importance of the 70th Anniversary of the People’s Republic of China.
Analysts have differing opinions as to what this will mean for the overall trade tensions between the two countries. Beijing has said that the exemption for certain U.S. products was intended to provide some relief for American companies impacted by the ongoing trade dispute, however, the products listed do not include important agricultural goods such as corn, soybeans, or pork. The exemption list from China’s Ministry of Finance did include several varieties of animal feed such as alfalfa and fish meal, as well as some farm chemicals.
The U.S. and China and the United States have now been exchanging tariff hikes for more than a year, which is having a significant effect on both economies. President Trump has highlighted the more than $400 billion trade deficit with China as being a major overall priority for his administration. As of August, Chinese imports of American products are down 22 percent and exports to the U.S. are down 16 percent. As it stands now, the U.S. intends to implement a 30 percent import levy on $250 billion worth of Chinese products on October 15.
There is hope that the good-faith gestures from both sides are an indication that future tariff increases can be averted. More trade negotiations are scheduled to take place in the coming weeks when Chinese President Xi Jinping returns to Washington. A date has yet to be decided as U.S. and Chinese officials continue to discuss the potential for an amicable trade deal.