After a prolonged deadlock in negotiations over a potential trade deal between China and US, US President Donald Trump signalled a truce by delaying some new tariffs on consumer goods that were set to take effect from 1 September until mid December for a period of over two months, Financial Times has reported.
The products include mobile phones, laptops, video game consoles, specific toys, computer monitors, and certain footwear and clothing.
In response to Trump's overtures, China's Ministry of Commerce said in a statement that the two countries plan to speak again in the coming weeks.“Both sides agree to talk again on the phone within two weeks,” the Ministry of Commerce said in a statement.
According to the statement, Chinese vice premier Liu He spoke with US Trade Representative Robert Lighthizer and Secretary of the Treasury Steven Mnuchin. Chinese commerce minister Zhong Shan and Central Bank governor Yi Gang also participated in the discussion.
Earlier in May, the White House steeply increased tariffs on $200 billion of Chinese imports from 10 per cent to 25 per cent, claiming Beijing had reneged on previously agreed terms of a trade deal. The US also currently has a 25 percent tariff on $50 billion worth of Chinese high-tech products.
After ratcheting up the rhetoric, Trump’s sudden move to deescalate is viewed as an acknowledgement that the fractious trade war between the world's largest economies may now be beginning to hurt US households and impact Trump's re-election bid.
“We are doing this for the Christmas season, just in case some of the tariffs would have an impact on US consumers. So far, they’ve had virtually none,” Trump said, as he prepared to board Air Force One to travel from New Jersey to Pennsylvania.
It has been reported that the protracted US-China trade war has begun taking its toll on other major world economies like Singapore which is now starting at a recession after predicting a 0 to 1 per cent growth rate for the current financial year.
The trade war had recently turned ugly when US had accused China of being a currency manipulator. This was reportedly a result of China allowing its currency to fall below the politically sensitive level of seven to the US dollar for the first time in 11 years and Chinese firms halted buying US farm produce.