The trade war just took another interesting turn.
All as President Trump tweeted that he’ll delay increasing tariffs on $250 billion worth of Chinese goods from October 1 to October 15, 2019, as a “gesture of goodwill” to China.
“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 70thAnniversary,” he tweeted, “on October 1st, we have agreed, as a gesture of good will, to move the increased tariffs on 250 Billion worth of goods (25% to 30%), from October 1st to October 15th.”
That announcement followed China’s move to exempt 16 U.S. products from additional tariffs, including food for livestock, cancer drugs, and lubricants. The exemptions, scheduled to go into effect on September 17, 2019 will be valid until September 16, 2020.
Even better, Beijing may be considering whether to allow imports of American agricultural products, including soybeans and pork, a move that would further alleviate trade tensions while bolstering support for Trump in the midwestern farm states, according to Bloomberg.
However, while such acts of goodwill are great for the headlines, tensions are still high.
Despite goodwill gestures, the two sides remain far apart on issues.
Beijing, for instance, says the U.S. must drop all trade war tariffs as part of any deal, while D.C. demands concessions on IP and state subsidies. “Things change very quickly, it’s hard to know what motivation there is — to be honest — on the U.S. side. So, I wouldn’t want to read too much into a small concession suggesting that we’re on the road to this being resolved,” says James McCormack, Fitch’s head of sovereign ratings, as quoted by CNBC.
It’s a wait and see what happens next.
For today, it’s nice to see Dow futures up 228 points on the news, with the NASDAQ up 86.