President Donald Trump declared Wednesday that China’s decision to reduce tariffs on certain U.S. products was “a big move” and a sign that China was suffering due to the ongoing trade war.
In return, as a “goodwill gesture,” Trump delayed the imposition of tariffs on $250 billion of Chinese goods for two weeks, a sign some people took that trade tensions may be easing.
But China’s concession, announced Tuesday, involves just 16 items from a list of more than 5,000. It had been in the works for months, and it will help Chinese businesses much more than U.S. ones.
Late Wednesday night, Trump tweeted that a rise in tariffs on $250 billion worth of Chinese goods that was due to go into effect at the start of October would now be delayed until October 15.
“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 goodwill to move the increased tariffs on 250 Billion Dollars worth of goods (25% to 30%), from October 1st to October 15th,” Trump tweeted.
“They took tariffs off, certain types,” he told reporters in the Oval Office on Wednesday. “I think it was a gesture. It was a big move. People were shocked. I wasn’t shocked.”
However, the Chinese exemptions only take into account items that China does not produce domestically, including cancer drugs, lubricants and certain chemicals.
What the list does not include is products produced by American farmers, such as pork and soybeans, items that have had the biggest impact on U.S. businesses.
In a note to customers, Iris Pang, greater China economist at Dutch bank ING, pointed out that China had been considering exempting these items since May, and that they didn’t really represent a genuine “gesture of sincerity towards the U.S.” ahead of talks in Washington next month.
“There are still many uncertainties in the coming trade talks. An exemption list of just 16 items will not change China’s stance. We believe that China will stand very firm in the negotiations, which will be similar to the last round of talks,” Pang warned.
Negotiations between Washington and China have been stalled for months as each side hits the other with increased tariffs. Last week, however, there were some signs that a resolution might be on the way, when Chinese officials agreed to travel to Washington next month for face-to-face talks.
But experts warn that China’s tariff exemptions this week should not be seen as evidence that Beijing is willing to make major concessions.
China expert Bill Bishop noted, in his popular Sinocism, newsletter that state-run media are going all-out to position the exemptions not as a concession, but as a sign that China’s economy is robust enough to deal with the trade war ahead of new talks.
“The list of tariff exclusions shows that China has a better policy mix to deal with economic and trade frictions,” an editorial on the CCTV website noted on Wednesday.
Hu Xijin, editor of the state-run Global Times, told Bloomberg the exemptions were not a sign of weakness from Beijing, but a decision that "shows psychological strength and self-confidence, it's different from a concession."
Cover: President Donald Trump talks about a plan to ban most flavored e-cigarettes, in the Oval Office of the White House, Wednesday, Sept. 11, 2019, in Washington. (AP Photo/Evan Vucci)