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Trump Agrees to Delay Increase in Section 301 Tariffs

President Trump said in a 24 February tweet that, in light of the “substantial progress…on important structural issues” made in the still on-going bi-lateral trade negotiations with mainland China, he will be delaying the increase from 10 percent to 25 percent in the additional Section 301 tariffs on so-called List 3 goods (valued at about US$200 billion) that is scheduled to take place on 2 March. The administration will have to publish a notice in the Federal Register – most likely sometime this week – to formalise the delay and such a notice may include additional details of potential interest, such as the exact duration of the delay. The president also signalled his intention to hold a meeting with mainland Chinese President Xi Jinping at the Florida resort of Mar-a-Lago in an effort to conclude an agreement.

The tweet announcing the delay was sent two days after the president met at the White House with members of the U.S. and mainland Chinese delegations. At the meeting, U.S. Trade Representative Robert Lighthizer referenced “major hurdles” still remaining in the negotiations while the president objected to the use by Lighthizer of the term “memorandum of understanding” to describe the deals that are being negotiated with mainland China (that term will now ostensibly be abandoned to describe any final deals).  Trump also praised Lighthizer’s “24 hour a day work” at the National Governors Association Ball held on 24 February, noting that the mainland Chinese delegation was only then returning home.  

When asked about reports of a possible deal with mainland China, Senate Finance Committee Ranking Democrat Ron Wyden (Oregon) declared that "to get the best deal for America, Donald Trump should be making it clear that he is prepared to walk away from a bad deal and not signal his eagerness to reach one just to appease his friends on Wall Street.” Wyden also requested that all details be publicly released. Sen. Pat Toomey (Republican-Pennsylvania), a member of the Finance Committee known to be critical of Trump’s trade policy, said that the president’s description of progress in the talks was "encouraging news” that will hopefully lead to “an agreement that stops China's theft of U.S. intellectual property and avoids a full-blown trade war.” Democratic Representative Bill Pascrell Jr. of New Jersey, a member of the House Ways and Means Committee, is encouraged by “signs of progress” but remains “concerned that the president will accept a quick offer of procurement of U.S. goods rather than fundamental reforms to China’s systemic problems.”

It is also worth mentioning that Lighthizer is scheduled to testify for the first time before the now Democratic-controlled House Ways and Means Committee on 27 February. Committee Chairman Richard E. Neal announced on 20 February that Lighthizer would be the only witness at the full committee hearing, which will focus on U.S. trade with mainland China.

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