China cancels its plans of imposing additional tariffs on U.S products on December 15th

The clouds of uncertainty are finally fading away from the long-held trade dispute between the United States of America and China. Following an official declaration from Washington and Beijing that a phase 1 trade deal has been finalized, the State Council’s customs tariff commission of China announced on Sunday that the additional tariffs which were scheduled to go live on the American imports on December 15^th have been suspended.

China Promised To Purchase $50 Billion Worth Of U.S Agricultural Products In 2020

In exchange, Trump Administration has agreed to reduce the tariffs on a few of the Chinese imports while suspending the next round of tariff hike scheduled for December 15^th, as the largest Asian economy pledged to upgrade its purchase of American agricultural products to $50 billion in 2020. China also promised to increase its purchase of other U.S products in order to finalize the deal with the White House.

The events of the U.S – China trade war have weighed on the global financial markets for almost two years. In an event of a no-deal, American products ranging from corn to vehicles, and wheat to auto parts, were expected to be subject to the retaliatory tariffs from China from December 15^th.

According to the official statement on the website of China’s finance ministry as well as a few other government departments, the tariffs previously imposed on the U.S products are expected to remain unchanged. The statement also highlights that China is excited to collaborate with the U.S on the basis of mutual respect and equality in an attempt to streamline the future economic relations between the two largest economies of the world. As per the statement, focusing on resolving the core concerns on both sides should be a top priority for the continuous progression of the trade relations.

USTR Says China Will Purchase $200 Billion Worth Of Additional Goods In The Next Two Years

Robert Lighthizer, in his capacity as the U.S trade representative (USTR), announced on Friday that China is willing to purchase as much as $200 billion of additional American products and services in the upcoming two years. The amount, he further added, is on top of what China had purchased in 2017. The USTR further added that the previously imposed 25% tariffs on Chinese products worth $250 billion will stay put.

The recent trade-related developments over the weekend haven’t had a chance to stir up a major movement in the forex market. Analysts, however, are expecting the currency market to respond with the start of the new week on Monday. USD/CNY closed the last week at 6.9849 level.