Mixed Feelings Arise as Trump Delays Tariff Increase on Chinese Goods

The Dow could be primed for a 10th straight week of gains

The Dow could be primed for a 10th straight week of gains

The extension of the latest round of negotiations and the delaying tariff increase on Chinese imports testify to the sincerity, high attention and sense of urgency of both the Chinese and USA sides.

Perhaps even more alarming is Trump's comment that he is prepared to intervene in judicial proceedings against Huawei, the Chinese telecommunications company whose chief financial official is being held in Canada pending extradition to the USA on charges of bank and wire fraud, violations of US sanctions on Iran and conspiracy to obstruct justice.

The trade war and its hefty tariffs have already raised costs for businesses and consumers.

China's economy grew at its slowest pace in 28 years last year.

Still, the tariffs on $200 billion worth of Chinese imports had been set to rise to 25% from the current 10% if no deal was reached by Friday. A spokeswoman for the U.S. Trade Representative's Office said the agency had no announcements at this time beyond the president's remarks.

China sees the trade frictions as both challenges and opportunities. In mid-2018, he showed no hesitation about rattling the global economy with a radical shift towards protectionism.

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The president's cancellation of the tariff hike stirred worries among some supporters, who fear he will abort his confrontation with China and settle for a weak deal.

Democrats in Congress were more pointed, saying Trump should be prepared to walk away from a bad deal. Contradicting the mercurial boss in public is the best way to lose your job, although Lighthizer will likely stick around for a while longer in an effort to stitch together a deal. China has retaliated with duties on United States dollars 110 billion of USA goods.

China and the United States are inching ever closer to reaching a mutually beneficial and win-win agreement with substantial progress achieved on specific issues in their latest round of high-level economic and trade talks ending on Sunday in Washington.

"It is important for each side to listen carefully to the other and to develop a win-win outcome", Hills, also a former US trade representative from 1989 to 1993, told Xinhua.

Negotiators have struggled this week to overcome differences on specific language to address tough USA demands for structural changes in China's economy, two sources familiar with the talks said.

The Shanghai Composite index rose 5.6 per cent to an eight-month high.

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The US-China trade spat was among the top concerns for businesses across sectors.

Two thirds of respondents said that the trade tensions had led them to change their business strategies, including delaying or canceling investment decisions, moving their supply chains or manufacturing operations, or even, in a few cases, exiting the Chinese market.

"Glad 2 hear that Pres Trump won't be increasing tariffs on China March 1 but I hope Lighthizer/Trump won't take a half deal as a good deal", tweeted Senator Chuck Grassley, the Republican chairman of the trade and tax-focused Senate Finance Committee.

It's better than the alternative, which is to make production practically impossible here in the US via the Green New Deal, incentivizing factories and growth elsewhere including China and making Americans even more dependent on imports.

It's going to be pretty hard for Trump to achieve so many conflicting policy goals at once. The ratcheting up of tariffs threatened to drag down global growth, but a major trade "deal", however illusory, would remove that danger.

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