President Donald Trump on Wednesday said he was postponing the imposition of 5 per cent 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 worth of goods (25 per cent to 30 per cent), from October 1st to October 15th,” Trump wrote on Twitter.
S&P 500 futures climbed 0.5 per cent and the offshore yuan strengthened 0.3 per cent 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.