Published: Thu, February 28, 2019
Money | By Bruce West

US President Donald Trump delays China tariff increase on trade deal 'progress'

US President Donald Trump delays China tariff increase on trade deal 'progress'

Both governments are now optimistic that an agreement can be worked out, and U.S. President Donald Trump and Chinese President Xi Jinping can close the deal at a "signing summit" in a few weeks.

Gold is trading in the green despite US-China trade optimism, possibly due to losses in the greenback. Since joining the WTO in 2001, the Chinese have ignored this rule and disingenuously claim that U.S. firms voluntarily agree to share their technology because they want to be active in China.

Mr. Trump ordered the tariffs using his authority under Section 301 of the Trade Act of 1974, which allows the president to retaliate against any nation that violates worldwide trade agreements or takes actions that restrict or burden US commerce.

- Donald J. Trump (@realDonaldTrump) February 24, 2019....productive talks, I will be delaying the USA increase in tariffs now scheduled for March 1.

In other news, China has committed to buying up to $1.2 trillion in USA goods, though as late as last week, the two sides were said to be far apart on issues concerning the forced transfer of intellectual property. Assuming both sides make additional progress, we will be planning a Summit for President Xi and myself, a Mar-a-Lago, to conclude an agreement. It is the best choice for both China and the United States to keep consultations on an equal footing and in the light of the consensus reached by the two presidents before a mutually beneficial and win-win agreement could be reached.

While markets rejoiced at the news, posting gains in the aftermath of the reports, there is ambivalence among experts.

Shares of US equipment maker Caterpillar and USA aircraft maker Boeing, both sensitive to global trade, rose 1.97 percent and 0.67 percent, respectively. The U.S. trade deficit with China reached a record $382 billion through the first 11 months of 2018.

"We want a deal that really addresses the persistent problems", said Stratford, a lawyer and former deputy USA trade representative. In short, there is nothing to celebrate if the Chinese agree to stabilise the value of their currency relative to the dollar.

Chinese officials did not answer questions as they left the U.S. Trade Representative's office on Thursday evening after more than nine hours of talks on Thursday. In the United States, consumption and the performance of US companies have deteriorated. The threat of US tariff hikes was the "dominating factor" for almost half, while others moved because of higher costs or tighter environmental regulation.

Market access - a long-time concern for US, European and other foreign businesses and at the top of the Trump administration's list of gripes - remains a problem for more than half of companies. After the Democratic Party's victory in November's midterm elections, Trump is also concerned about shoring up his support as the 2020 presidential race begins.

ENERGY: U.S. crude oil gave up 8 cents to $55.40 per barrel in electronic trading on the New York Mercantile Exchange.

Japan will welcome termination of the U.S.

But the American president can ill-afford an economic downturn, which would be much more likely if he continues with his trade war. Equally troubling would be a belief in the US that tariffs is the best way to achieve results.

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