After positive trade talks in Washington, the Trump Administration announced on Friday that it is suspending a 5% tariff hike on over $250 billion worth of Chinese goods. The additional tariffs were set to take effect on Tuesday, October 15 and would have increased the duties on List 1, 2, and 3 goods from 25% to 30%. In return, China has agreed to buy $40-$50 billion in American farm products.
The President said that China and the U.S. are close on a limited deal and that the two sides had made some progress on the thornier issues, such as China’s lax protection of foreign intellectual property. While providing scant details of what was agreed to on Friday, the White House said that China has pledged to be more transparent about how it sets the value of its currency. The Trump Administration had accused China of manipulating the yuan to give its exporters a price advantage in foreign markets. China has also agreed to open its markets to U.S. banks and other financial services providers.
The U.S. still has tariffs on more than $360 billion worth of Chinese goods in place and is still expecting to slap tariffs on $160 billion in December.
Trump announced the truce after 2 days of meetings in Washington with the top Chinese negotiator, Vice Premier Liu. While the two sides made some progress last week, there is still more work to be done on key differences in later negotiations, including allegations that China forces foreign countries to hand over trade secrets in exchange for access to Chinese markets.