In what could be termed as a temporary relief to China and other countries affected by the trade war between the world’s two largest economies, US President Donald Trump on Sunday announced an extension of the March 1st deadline for increasing import tariffs on more than 200 billion $ worth of Chinese goods.
Trump via a tweet stated “The US has made substantial progress in our trade talks with China on important structural issues including intellectual property protection, technology transfer, agriculture, services, currency and many other issues, and as a result of these very productive talks, I will be delaying the US increase in tariffs that are scheduled for March 1st”.
Trump praised Chinese Premier Xi JinPing for his help in talks with North Korea and said that if both, US and China, make additional progress in trade negotiations, he would host his Chinese counterpart at his resort in Florida to finally conclude an agreement and put an end to the trade war.
As a result of this optimism, US stock futures climbed, Chinese shares surged in early morning trade and the Yuan strengthened. This decision is also expected to soothe investor concerns around the world and comes at a good time, as concerns about global growth slowing were beginning to emerge.
However, cause for concern still remains, as this was just pause in rate hikes and no final agreement has been inked. As one Chinese official rightly put it “The trade war is still on, but just not getting worse”.
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