US President Donald Trump has surprised markets by delaying the implementation of a 10% tariff on Chinese goods, indicating a possibility of talks with Beijing to address trade tensions. Trump's decision follows his recent agreements with Canada and Mexico to postpone tariffs in exchange for stricter border measures. While the precise agenda remains unclear, the focus appears to be on fentanyl trafficking and the fate of TikTok, with Trump urging China to utilize its surveillance capabilities to combat the opioid crisis and expressing his interest in a potential solution for TikTok's US operations. Despite the conciliatory tone, China's response has been muted but firm, vowing unspecified countermeasures and criticizing the connection between fentanyl and trade. The global economic impact of these escalating tensions remains a significant concern.
US President Donald Trump announced his administration's intention to engage in discussions with China , raising the possibility of a reprieve on the upcoming 10% tariff slated to take effect. This comes after Trump delayed the implementation of levies on Canada and Mexico.
In a press conference held in Washington on Monday, February 3rd, Trump stated that talks with China would likely occur 'probably over the next 24 hours,' a day after he had declared tariffs on China would commence at 12:01 am on Tuesday.The Hang Seng China Enterprises Index, which monitors Chinese stocks traded in Hong Kong, experienced a surge of up to 3.6% on Tuesday, while the offshore yuan strengthened by almost 1% from Monday's low, trading around 7.31 per dollar. Trading in onshore markets will resume on Wednesday following the Chinese New Year break. White House Press Secretary Karoline Leavitt later informed Fox News that President Trump planned to speak with Chinese President Xi Jinping regarding 'illegal Chinese fentanyl that is killing tens of thousands of Americans every single year.' Leavitt emphasized that 'the president has made it very clear to China that we are not going to tolerate that,' adding that 'many of President Trump’s tariffs from the first term are still in effect.' The spotlight has shifted to China, the world's second-largest economy, after Trump secured last-minute agreements with Mexico and Canada to postpone 25% tariffs in exchange for stricter measures against migration and drug trafficking at the border. For Beijing, a potential agreement concerning the division of ownership of the China-owned app TikTok is likely to be on the agenda of any leaders' call. Trump expressed his 'great interest in TikTok!' on his Truth Social platform Tuesday morning, stating 'it would be wonderful for China, and all concerned.' The Republican has given ByteDance Ltd's social media app, which has been designated as a national security threat, 75 days to find a US partner to continue operating in the country. China's initial response to Trump's tariff announcement - coinciding with a week-long Lunar New Year holiday - was relatively subdued. The Commerce Ministry issued a statement expressing strong 'dissatisfaction' and vowed unspecified 'corresponding countermeasures,' while indicating that China would file a complaint at the World Trade Organization. This is not uncommon. During the first trade war, Beijing typically retaliated only after tariffs became law. However, the economic situation in China is currently weaker, and it exports fewer products directly to the US. China also possesses more tools at its disposal if it chooses to retaliate. A series of laws enacted since Trump's first term, for example, grant Beijing greater influence over domestic business transactions in the name of national security. Trump's weekend order urged China to utilize its extensive surveillance network to curb criminal organizations involved in the trafficking of illicit drugs. The specifics of this request were not elaborated upon, leaving Xi Jinping with no clear path to avoid the tariffs, particularly as Beijing has already pledged to crack down on domestic chemical companies implicated in the production of the deadly synthetic opioid. Trump and Xi last spoke before Trump's second inauguration, in a call where they discussed trade, fentanyl, and TikTok. Trump characterized that conversation as 'very good,' but days later proceeded with threats of tariffs on China. Chinese state media questioned Trump's rationale for the tariffs, warning that linking fentanyl and trade would only complicate 'governance of this problem.' 'What’s the logical relationship between fentanyl and tariffs?’ China Central Television wrote in an article late Monday. 'The world can’t solve this ridiculous question.' - Bloomberg Singapore factory activity growth slows as Asia braces itself for the impact of Trump tariffs Gold prices hold near record highs as US tariff concerns linge
Trump China Tariffs Fentanyl Tiktok Trade War Xi Jinping US Economy Global Economy
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