Trump and Xi close to a deal, but the trade war isn’t over

WASHINGTON • The world’s two largest economies are nearing the finish line on a trade deal that could be signed by US President Donald Trump and his Chinese counterpart Xi Jinping as early as this month. But that doesn’t mean the trade war ends.

More work remains on a deal that will ensure that Beijing will follow through on its commitments, US Trade Representative Robert Lighthizer told Congress last week. Days later, Trump warned he can still walk out on China like he did with North Korean leader Kim Jong-un at their summit over a nuclear deal in Vietnam.

There was a sign of de-escalation yesterday, when the US confirmed it’s postponing “until further notice” a scheduled tariff increase on Chinese goods. It had been set to take effect on March 1, but now the rate will remain at 10%, according to a statement from the US Trade Representative’s office.

Formalising a plan Trump announced last week, the US Trade Representative’s office published a statement in the Federal Register stating it was “postponing the date on which the rate of the additional duties will increase to 25% for the products of China covered by the September 2018 Action in this investigation”.

The US and China are said to be close to a trade deal that could lift most or all US tariffs as long as Beijing follows through on pledges ranging from better protecting intellectual-property rights to buying a significant amount of American products.

Trump has repeatedly delayed implementing higher duties on goods to give the two sides more time to strike a broad deal. — Bloomberg