The USA has announced its “punitive” import tariffs on Chinese products will be postponed, in the face of a potential trade war.
United States Treasury Secretary Steven Mnuchin explained that the two countries are hoping to negotiate different ways to reduce the trade deficits, reports Nikkei Asian Review.
“We are putting the trade war on hold,” said Mnuchin. “Right now, we have agreed to put the tariffs on hold while we try to execute the framework.”
The potential trade war arose after Donald Trump threatened China with a 25 percent import tariff on $50 billion (€42.6 billion) of electronics, aerospace and machinery products, as a consequence of the nation’s alleged infringement of IP rights. After retaliations from Beijing, Trump then called for further tariffs on subsequent imports.
Following “intense trade negotiations” last Friday, however, a joint statement was released that pledged to reduce the trade imbalance.
“To meet the growing consumption needs of the Chinese people and the need for high-quality economic development, China will significantly increase purchases of United States goods and services,” it read.
Mnuchin declared that China will now increase its purchases of American agricultural products and energy, as a term of the deal, which will be followed by further negotiations to “hammer out specifics” as the countries attempt to avoid a trade war.
According to state-run China Daily, “the two sides have successfully averted the head-on confrontation that at one point seemed inevitable.”
Robert Lighthizer, however, a US Trade Representative, insisted that pressure to resolve trade issues must be kept on the superpower.
“Getting China to open its market to extra U.S. exports is critical,” he said. “However, the way more essential points revolve round pressured expertise transfers, cybertheft and the safety of our innovation.”
