Donald Trump said the US has cancelled plans to impose new tariffs on 160 billion dollars (£120 billion) of Chinese imports from Sunday as part of a modest interim agreement that de-escalates a 17-month trade war between the world’s two biggest economies.
The US is also reducing existing import taxes on about 112 billion dollars (£84 billion) in Chinese goods from 15% to 7.5%
In return, Mr Trump said on Twitter, the Chinese have agreed to “massive” purchases of American farm and manufactured products. He did not specify how big those purchases would be.
…..The Penalty Tariffs set for December 15th will not be charged because of the fact that we made the deal. We will begin negotiations on the Phase Two Deal immediately, rather than waiting until after the 2020 Election. This is an amazing deal for all. Thank you!
— Donald J. Trump (@realDonaldTrump) December 13, 2019
Chinese officials said that if Washington reduces the tariffs, Beijing will lower its trade penalties on American goods and also scrap plans for new tariffs from Sunday.
“China is ready to work with the US side to do more to promote growth in trade,” said Liao Min, deputy finance minister.
Asked to confirm reports that Beijing had committed to buy 50 billion dollars (£37 billion) of American farm goods, he said details would be released later.
The Phase 1 deal leaves unresolved some of the thorniest issues, but Mr Trump said work on a follow-up would begin “immediately, rather than waiting until after the 2020 Election. This is an amazing deal for all. Thank you!”
Before Friday’s announcement, Chinese foreign minister Wang Yi had complained during a government-organised forum in Beijing that Washington was unfairly attacking China.
“The US side has successively imposed unjustified restrictions and crackdowns on China in economy and trade, science and technology and personnel exchanges,” he said. “As far as China is concerned, what we are pursuing is our justified rights of development.”
Since July 2018, the Trump administration has imposed import taxes on 360 billion dollars in Chinese products. Beijing has retaliated by taxing 120 billion dollars in US exports, including soybeans and other farm products that are vital to many of Mr Trump’s supporters in rural America.
On Sunday, the US was set to start taxing an additional 160 billion dollars in Chinese imports, a move that would extend the sanctions to just about everything China ships to America.
Repeated rounds of negotiations had failed to achieve even a preliminary agreement. The prolonged uncertainty over Mr Trump’s trade policies has curtailed US business investment and held back economic growth.
Many corporations had slowed or suspended investment plans until they know when, how or even whether the trade standoff would end.