China sticking to September U.S. trade talks after tariff delay

People familiar with the matter said Chinese officials are sticking to their plan to visit Washington in September for face-to-face trade meetings. Therefore, talks remain on track for now despite an abrupt escalation in tariff threats this month.

On Tuesday the U.S. delayed the imposition of new tariffs after top negotiators spoke on the phone, with President Donald Trump saying the encounter was “very productive,” and that he thinks Beijing wants to “do something dramatic” to end the impasse. S&P 500 futures erased their losses, the yen pared gains, and the yuan rose slightly on the news.

Still, Chinese negotiators are not very optimistic of any imminent progress, one of the people said. Officials are unlikely to make concessions in the run up to October 1, the celebration of the 70th anniversary of the founding of the People’s Republic.

Tensions between the world’s two biggest economies rose this month after Trump said he would tariff another $300 billion of Chinese goods, prompting Beijing to halt U.S. agricultural purchases and allow the yuan to weaken. The escalation brought into question whether talks planned for September would still go ahead, with Trump saying it’s "fine" if they don’t.

Prospects for genuine progress in trade talks are low, especially as Chinese President Xi Jinping tackles weeks-long protests in Hong Kong that his government blames the U.S. for instigating. The next call between the negotiating teams will be in two weeks.