Trump Delays Increase in Tariffs on Chinese Goods, Cites Progress in Talks

February 24, 2019 Updated: February 25, 2019

WASHINGTON—President Donald Trump said on Feb. 24 he would delay an increase in U.S. tariffs on Chinese goods scheduled for later this week thanks to progress in trade talks and said if progress continued, he and Chinese leader Xi Jinping would seal a deal.

Trump had planned to increase tariffs to 25 percent from 10 percent on $200 billion worth of Chinese imports into the United States if a deal were not reached by Friday, March 1, between the world’s two largest economies.

The president said in a tweet that progress had been made on a host of divisive areas including intellectual property protection, technology transfers, agriculture, services, and currency.

As a result of the talks, he said: “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!”

Mar-a-Lago is the president’s property in Florida where the two men have met before.

The delay in tariffs was the clearest sign yet of a breakthrough the two sides have sought since calling a 90-day truce in a trade war last year.

President Donald Trump (R) and Chinese President Xi Jinping
President Donald Trump (R) and Chinese leader Xi Jinping (L) shake hands during dinner at the Mar-a-Lago estate in West Palm Beach, Fla., on April 6, 2017. (Jim Watson/AFP/Getty Images)

During talks that extended into the weekend, U.S. and Chinese negotiators were discussing on Feb. 24 the thorny issue of how to enforce a potential trade deal after making progress on other structural issues, according to a source familiar with the talks.

The two sides were discussing tariffs on Feb. 24 as well as commodities, the source said.

U.S. officials said on Feb. 22 that talks would extend into the weekend after negotiators produced a deal on currency during talks last week.

US-China trade talk
U.S. Trade Representative Robert Lighthizer (4thL), Treasury Secretary Steven Mnuchin (3rdL), Commerce Secretary Wilbur Ross, White House economic adviser Larry Kudlow and White House trade adviser Peter Navarro pose for a photograph with China’s Vice Premier Liu He (4thR), Chinese vice ministers and senior officials before the start of US-China trade talks at the White House in Washington on Feb. 21, 2019. (Joshua Roberts/Reuters)

Negotiators were seeking to iron out differences on changes to China’s treatment of state-owned enterprises, subsidies, forced technology transfers, and cyber theft.

The two sides have been negotiating an enforcement mechanism. Washington wants a strong mechanism to ensure that Chinese reform commitments were followed through to completion, while Beijing insisted on what it called a “fair and objective” process. Another source briefed on the talks said that enforcement remained a major sticking point as of Feb. 23.

Trump said on Feb. 22 there was a “good chance” a deal would emerge and foreshadowed that he might extend the March 1 deadline and move forward with a meeting with Xi.

China May Use N Korea as Bargaining Chip in Trade Talks, Expert Says

If talks don’t yield a satisfactory outcome, an increase in tariffs and the resulting tensions may hurt U.S.–North Korea engagement as well, an expert said.

Right before the “hard deadline,” President Donald Trump will hold a second summit with North Korean Leader Kim Jong Un on Feb. 27 and 28 in Vietnam.

President Donald Trump and North Korean leader Kim Jong Un
U.S. President Donald Trump and North Korean leader Kim Jong Un during a break in talks at their historic U.S.-North Korea summit in Singapore on June 12, 2018. (Saul Loeb/AFP/Getty Images)

The timing of these meetings is critical as the U.S.–China relationship is a significant part of the recent developments in the Korean Peninsula, according to Harry Kazianis, director of Korea Studies at the Center for the National Interest, a foreign policy think tank.

“It’s very hard for the United States because, unfortunately, we’ve made a tactical mistake when it comes to China and North Korea,” Kazianis told NTD, part of The Epoch Media Group.

“Essentially, our maximum pressure policy of economic sanctions is almost entirely enforced by Beijing because 90 percent of North Korea’s exports go through China,” he explained.

The Trump administration launched a maximum pressure campaign against North Korea in 2017 to try to end its illicit missile and nuclear activity, through sanctions and regional alliances.

Communist China’s anti-reformists may use North Korea as a bargaining chip at some point in the trade talks, Kazianis argued.

“Unfortunately, they could do that by opening the border,” he argued, saying that China could end the maximum pressure campaign on North Korea. “So there’s a balancing act I think the Trump administration is trying to do here.”

However, both sides have reasons to compromise, according to Kazianis, as China’s economic woes continue to put pressure on the Chinese economy.

The Chinese economy has come under greater downward pressure mainly due to trade friction with the United States. Economic growth in China slowed to its weakest pace in nearly three decades in the fourth quarter. If both sides fail to reach a deal and trade tensions resume, China’s troubles will deepen, according to experts.

Reuters and The Epoch Times reporter Emel Akan contributed to this report

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