BCN-03,04 US to delay China tariff increase after ‘progress’ in trade talks

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US-CHINA-TRADE-ECONOMY

US to delay China tariff increase after ‘progress’ in trade talks

WASHINGTON, Feb 25, 2019 (AFP) – The United States is delaying a planned
increase of tariffs on more than $200 billion in Chinese exports after both
sides hailed “substantial progress” made in trade talks.

US President Donald Trump also said Sunday that he planned to hold a
summit with Chinese President Xi Jinping at his Florida estate Mar-a-Lago to
ink a deal.

“I am pleased to report that the U.S. has made substantial progress in our
trade talks with China on important structural issues including intellectual
property protection, technology transfer, agriculture, services, currency,
and many other issues,” Trump wrote on Twitter.

After exchanging tit-for-tat tariffs on more than $300 billion in total
two-way trade, Trump and Xi in December declared a truce and agreed to hold
off on further tariffs or retaliation for 90 days.

Trump initiated the trade war, which ate into company profits and
contributed to stock market plunges, because of complaints over unfair
Chinese trade practices — concerns shared by the European Union, Japan and
others.

“As a result of these very productive talks, I will be delaying the U.S.
increase in tariffs now scheduled for March 1. 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. A very good weekend for U.S.
& China!” Trump tweeted.

China’s official Xinhua news agency echoed those sentiments, saying the
two sides “made substantial progress on specific issues” such as the transfer
of technology, intellectual property protection, non-tariff barriers, the
services sector, agriculture and exchange rates.

The delegations “came a step closer to realizing the important consensus
reached” by Trump and Xi when they agreed to the truce in December, it added.

The report said the parties also agreed to “carry out follow-ups in
accordance with the instructions of the two heads of state.”

Trump had already expressed optimism about the negotiations Friday after
meeting with China’s vice premier Liu He, who led the Chinese side for the
talks that concluded Sunday.

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– Steps forward –

Tokyo stocks opened higher supported by optimism over the deal that also
lifted US shares. The benchmark Nikkei 225 index gained 0.59 percent, or
125.58 points, at 21,551.09 in early trade, while the broader Topix index was
up 0.58 percent, or 9.32 points, at 1,618.84.

The dollar fetched 110.76 yen in early Asian trade, against 110.75 yen in
New York Friday.

In Tokyo, some China-linked shares were higher, with construction
machinery maker Komatsu up 1.71 percent at 2,873 yen and electronic parts
maker Rohm up 2.05 percent at 7,460 yen.

Xi also struck a positive tone in a letter Liu delivered to Trump, saying
he hoped the negotiations would be held in a “win-win” spirit that would lead
to a mutually beneficial agreement.

The Chinese president expressed hope that the talks maintain “a mutually
respectful, cooperative and win-win attitude” and lead to a “mutually
beneficial” agreement.

Trump said Friday that an agreement on currency manipulation will be
included in the trade pact, but otherwise few details have been made public.

The seven-month-old trade war has rattled global markets and prompted
stark warnings about the risks to the world economy.

Analysts say the two sides are likely to trumpet mutual agreements to
resolve the easier parts of the trade dispute — increasing purchases of
American goods, more open investment in China and tougher protections for
intellectual property and proprietary technology.

The harder parts covering issues such as scaling back China’s ambitious
industrial strategy for global preeminence, meanwhile, are another question.

Beijing has reportedly proposed a significant increase in its imports of
US energy and agricultural exports. Still, a broader deal could be difficult
given the US demands for far-reaching structural changes.

China’s retaliation has hit US farm exports hard. The US Agriculture
Department estimated this month that US soy exports would not return to their
pre-trade war levels for another six years.

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