US to suspend China tariff hike ‘until further notice’

Announcement comes after US trade representative testifies that a US-China trade agreement is still far from completion.

US Trade Representative Robert Lighthizer testifies before House Ways and Means Committee hearing on 'US-China Trade' [Kevin Lamarque/Reuters]

The US Trade Representative’s office said on Wednesday it would move to formally suspend a scheduled tariff increase on Chinese goods “until further notice” following President Donald Trump’s decision to delay his Friday deadline for a US-China trade deal amid progress in their talks.

The statement was issued after US Trade Representative Robert Lighthizer’s testimony to the US House Ways and Means Committee, in which he said USTR was following a legal process to implement the delay.

“In accordance with the president’s direction, the Office of the United States Trade Representative will publish a notice in the Federal Register this week to suspend the scheduled tariff increase until further notice,” USTR said in an emailed statement.

During his testimony on Wednesday, Lighthizer said the United States will need to maintain the threat of imposing tariffs on Chinese goods for years even if Washington and Beijing strike a deal to end a costly trade war.

The US and China still have hard work ahead to secure a pact not only to end the dispute but to ensure any agreements are met, the top US trade negotiator told the House panel. 

Lighthizer detailed a long road ahead to overhaul trade dealings between the world’s two biggest economies.

“The reality is this is a challenge that will go on for a long, long time,” Lighthizer said. He earlier said he “is not foolish enough” to believe that a single negotiation will change the increasingly sour bilateral trade relationship.

Lighthizer defended the Trump administration’s use of tariffs, saying they are the only tool to push China to make the major structural changes that he, Trump and many of the lawmakers themselves are seeking.

“If there is disagreement at my level, the US would expect to act proportionately but unilaterally,” he said. 

Lighthizer’s comments on Wednesday appeared to curb market hopes a deal is imminent, with major US stock indexes dipping into negative territory. 


Global equity markets rose after Trump earlier this week delayed the March 1 deadline to raise tariffs to 25 percent from 10 percent and said he may soon meet with China’s President Xi Jinping to finalise a deal.

Lighthizer’s comments that a deal is not imminent were “enough to cause the markets to sell off”, said Michael Antonelli, a managing director at Robert W Baird in Milwaukee.

‘Most severe challenge’

The issues that the US faces with China are “too serious” to be resolved by promises to purchase more US goods – structural change by China is needed, said Lighthizer, describing a long-term effort to secure the key changes the US is seeking from China.

China has offered to buy an additional $1.2 trillion of US products over six years, people familiar with the talks have said, which would be a welcome relief to farmers and businesses hit hard by Beijing’s retaliatory tariffs.

But politicians have urged the Trump administration not to allow potential big-ticket purchases to distract them from pursuing an end to what the US alleges are unfair trade practices.

China represents the “most severe challenge” ever faced by US trade policymakers and congressional support has been “critical in persuading China” to take Washington’s concerns more seriously, Lighthizer said on Wednesday. 


The US has accused Beijing of forcing US companies doing business in China to share their technology with local partners and hand over intellectual property secrets. China denies it engages in such practices.

Trump administration officials also object to non-tariff barriers in China, including industrial subsidies, regulations, business licensing procedures, product standards reviews and other practices that they say keep US goods out of China or give an unfair advantage to domestic firms.

Lighthizer on Wednesday said that while some progress has been made in the talks, the US needs to be able to take unilateral action to enforce any agreement.

“I don’t believe this is going to solve all the problems between the United States and China,” Lighthizer said.

“We’re going to be back here and working our way through problems, always with one eye toward the future,” he added, saying that the US is seeking monthly meetings for lower-level officials, quarterly meetings for vice ministers and semiannual meetings at the ministerial level for the enforcement process.

Lighthizer also said the US is seeking to prevent China from competitive devaluation of its currency as part of the talks.

‘Substantial’ new purchases

While politicians from major agricultural states broadly shared their support for a deal that addresses these core issues, they sounded the alarm about the impact of tariffs. US farmers have been among the hardest hit by retaliation from China, the top market for many of their products. 


Lighthizer said Trump’s team is pushing China to promise to make “substantial” new purchases of US products, including soybeans, corn, ethanol and cotton.

The purchase plan is designed to secure future demand as well, he said.

“Our hope is if you increase those agriculture sales, you would create new customers and results that go out years and years and years and years,” Lighthizer said.

Source: Reuters