Trump delay on Chinese tariffs boosts hope of trade war truce

Donald Trump speaks during a meeting with Chinese Vice Premier Liu He in the Oval Office of the White House

Donald Trump speaks during a meeting with Chinese Vice Premier Liu He in the Oval Office of the White House

President Donald Trump said Sunday he will extend a deadline to escalate tariffs on Chinese imports, citing "substantial progress" in weekend talks between the two countries. The Trump administration has said it might ban Huawei products over a 2017 Chinese law that obligates its companies to assist in intelligence gathering as Wanzhou waits to see whether she will be extradited to the US for allegedly violating trade sanctions against Iran.

Trump tweeted Sunday about "substantial" progress in discussions of trade between the USA and China, the two largest economies in the world.

A top US business lobby in China said on Tuesday that a majority of its member companies favored the United States retaining tariffs on Chinese goods while Washington and Beijing try to hammer out a deal to end a months-long trade war.

The Chinese government's top diplomat, State Councillor Wang Yi, told a forum in Beijing on Monday that the talks had made "substantive progress", providing positive expectations for the stability of bilateral ties and global economic development, China's Foreign Ministry said.

The delegations "came a step closer to realising the important consensus reached" by Trump and Xi late previous year, Xinhua said. Tariffs and commodities were also on Sunday's agenda, he said. "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", Trump tweeted.

As we reported over the last week, the U.S./China relations have been incredibly volatile since 2017, with new rounds of tariff impositions and accusations from diplomats.

As late as this past Friday, Trump had planned to levy more tariffs on China.

At the White House event with governors on Sunday, Trump said Lighthizer was doing a "fantastic" job.

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National Association of Manufacturers chief executive Jay Timmons urged Mr Trump to press ahead "with a rules-based agreement that ends (China's) intellectual property theft and other significant unfair trade practices".

"Let´s see what happens".

"This raises the chances of a deal but makes it harder for the United States to pressure China into making significant concessions related to its industrial and economic strategies".

The delay is likely to calm volatile financial markets. There are also several major stumbling points to overcome, including on the "verification and enforcement" of USA intellectual property used in China, particularly in the technology industry.

The two sides have been negotiating an enforcement mechanism.

But even after four rounds of talks, progress towards achieving the more hard parts of a deal has been unclear.

"Underlying tensions on technology, China´s industrial policy and, more broadly, its rise, will not subside any time soon", he said in a note.

Beijing has reportedly proposed a significant increase in its imports of U.S. energy and agricultural exports.

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