US president Donald Trump has announced that that he has decided to withhold imposition of any more trade tariffs on imports from China. This statement has put an end to the worries that Chinese goods will become more expensive after March 1, 2019 as Trump had earlier threatened that if the talks between US and China are inconclusive then import duties will be raised from present level of 10% to 25%. Trump stated today that he is planning on having summit level talks with Chinese President Xi Jinping at Florida and will cement a viable trade deal if effective progress is made.
He also stated that delegates from both sides have made “substantial progress” in their discussions about trade relations which has led to upsurge in China’s stock market by 5%. Chinese official news agency Xinhua stated that progress has been made on discussions around topics like technology transfer, agriculture and protection of intellectual property. Mr. Trump’s decision to put a stay on tariffs worth $200 billion on Chinese goods was seen as a progressive move forward that both sides are keen on reaching a viable end to their damaging trade war.
Sources close to both parties stated that China has given a given commitment to purchasing $1.2 trillion worth of American goods but there has been little headway about protection of intellectual property due to which the trade war had actually been initiated. During early phase of the trade war around $250 billion worth of Chinese goods had been brought under tariffs and China had also imposed duties worth $110 billion on several US products. The trade dispute that even now has not been resolved completely has unnerved financial markets in US and added pressure to the Chinese economy that is already showing signs of decline. Late last year IMF had warned that if the ongoing trade war between two of the world’s largest economies does not end soon it could make the world a dangerous place.