US businesses upbeat about tariff overtures
Moves expected to set stage for 'earnest discussions' on trade in coming week
Leading US business groups said they expect that the latest goodwill gestures of the US and Chinese governments will usher in "productive" talks and put an end to the tariff increases that have led to their protracted trade war.
Plans were announced on Wednesday by the US leader to delay a tariff increase on $250 billion worth of Chinese imports planned for Oct 1 for two weeks, until Oct 15. China also said earlier in the day that it was exempting 16 types of US products from duties.
On Friday in Beijing, the Customs Tariff Commission of the State Council said it will exclude some agricultural products like soybeans and pork from the additional tariffs on US goods, Xinhua News Agency reported official sources as saying.
Also, Reuters reported that Chinese firms bought at least 10 boatloads of US soybeans, the country's most significant purchases since June.
"We hope this (US) announcement, combined with other confidence-building measures from both governments, will create the conditions necessary for productive trade negotiations and end the cycle of tit-for-tat retaliatory actions," the Washington-based US-China Business Council said on Thursday.
On Thursday afternoon, the US leader told reporters he doesn't want an interim deal, adding that he would rather get the whole deal done.
Also on Thursday in Beijing, Vice-Premier Liu He said in a meeting with USCBC Chairman Evan Greenberg that the entire world looks forward to seeing progress in trade consultations between China and the United States.
The USCBC represents about 200 US companies that do business with China, including some of the world's best-known brands.
Liu said that working groups from the two nations will meet next week and have "earnest discussions" on the trade balance, market access, protection of investors and other issues of common concern, according to Xinhua.
Greenberg said the US business sector does not want to see a rise in tariffs, and hopes that the two countries will solve their differences through consultations and bring bilateral trade back to normal.
USCBC President Craig Allen said, "Tariffs are a tax on our businesses and consumers — the impact on supply chains and company confidence is clearly hurting the economy." Unilateral imposition of tariffs makes US companies less competitive in the global arena, he added.
"We urge both sides to work toward eliminating tariffs, realize the concrete progress that is possible today, and build momentum for longer-term negotiations on the most challenging issues," Allen said.
Jennifer Safavian, executive vice-president of government affairs at the Retail Industry Leaders Association, said leading US retailers are hopeful the president's gesture of goodwill in delaying the tariff increases will lead to productive talks between the two countries next month.
"A resolution is sorely needed that puts an end to the tariff increases," she said.
RILA, based in Arlington, Virginia, near Washington, represents more than 200 retailers, product manufacturers and service suppliers, which together account for more than $1.5 trillion in annual sales, millions of US jobs and more than 100,000 stores.
"Consumer confidence is the one pillar of strength in the US economy, and the president's tariff strategy is threatening that, as higher prices will be imposed on consumer goods with increased tariffs," Safavian said. "Negotiating a path forward that puts an end to the erratic tariff increases and provides some dose of certainty to businesses should be the goal for the October trade discussions."
The International Monetary Fund said on Thursday that the rising trade and geopolitical tensions have increased uncertainty, taking a toll on business confidence, investment and global trade.
"Our latest estimate is that … the US-China tariffs, including those implemented and announced, could potentially reduce the level of global GDP by 0.8 percent in 2020, with additional losses in future years," IMF spokesman Gerry Rice said.
Gary Shapiro, president and CEO of the Consumer Technology Association, also based in Arlington, said in a statement Wednesday that increasing tariffs are giving the stock market whiplash, and consumers are getting worried — last month consumer sentiment dropped almost 10 percentage points.