Published: Thu, September 12, 2019
Economy | By

Donald Trump praises China's tariff exemptions as trade talks approach

Donald Trump praises China's tariff exemptions as trade talks approach

US President Donald Trump announced on Wednesday that he agreed to delay an increase in tariffs on US$250 billion worth of Chinese goods by two weeks, saying the decision was requested by Beijing.

"Chinese tariffs that really matter are the ones on U.S. agricultural and manufacturing goods, produced mainly in states with strong support for [President] Donald Trump", Artur Baluszynski, head of research at Henderson Rowe, told CNN Business.

China announced Wednesday it would exempt 16 categories of products from USA tariffs, ahead of a fresh round of trade talks next month.

The move comes before a planned meeting in early October between top USA and Chinese trade negotiators in Washington aimed at easing a trade conflict that has disrupted global supply chains and rattled financial markets. Farming and energy sectors have been hit especially hard, and some economic forecasters have predicted that a recession is imminent.

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The ministry said items on the two tariff exemption lists posted on its website will not be subject to additional duties imposed by China on US goods "as countermeasures to US Section 301 measures", it said.

The exemptions will become effective on September 17 and be valid for a year, according to the Customs Tariff Commission of the State Council, which released two lists that include seafood products and anti-cancer drugs.

But the standoff is a very close second, and more than half of companies surveyed said they were delaying or reducing further investment in China as a direct result of the tit-for-tat tariffs.

China Vice Premier Lui He and President Donald Trump

"I deal with them and I know them and I like them", he said.

Against that backdrop, both sides are preparing to return to the negotiating table.

Trump has said the protracted trade war is damaging China more than the United States.

American farmers have born the brunt of the US-China trade spat, especially after US soy exports collapsed last year, virtually wiping out foreign markets farmers had spent years cultivating.

Analysts say that with its duties on soybeans and US -made cars, China is taking aim at a key political support base of Trump, mainly the factories and farms across the Midwest and South at a time of receding momentum in the world's top economy.

Trump has offered billions in aid to farms badly damaged in the trade war.

It looks as if it could lead to China buying USA agriculture products again.

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