(Bloomberg) --
Chinese officials are sticking to their plan to visit Washington in September for face-to-face trade meetings, people familiar with the matter said, signaling that talks remain on track for now despite an abrupt escalation in tariff threats this month.
The U.S. on Tuesday delayed the imposition of some 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.
That said, 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, the person said.
S&P 500 futures erased their losses, the yen pared gains and the yuan rose slightly on the news. The Ministry of Commerce did not immediately respond to a request for comment.
Tensions between the world’s two biggest economies rose significantly 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.
Though Trump has often denied his tariffs have any impact on consumer prices and insists their cost is being borne by China, he also said the delay had been made “so it won’t be relevant to the Christmas shopping season.”
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.
Whether or not the talks actually take place also depends on developments between now and then, according to one of the people. The next call between the negotiating teams will be in two weeks.
Trump’s move to delay some tariffs involved the splitting of an almost $300 billion list of products from China into two separate ones. Lots of agricultural products, antiques, clothes, kitchenware and footwear remained on the list to be hit Sept. 1 -- with a total of more than $110 billion, according to a Bloomberg News analysis of last year’s import figures.
But big-ticket categories such as smart-phones, laptops, and children’s toys -- worth about $160 billion -- would only be subject to tariffs after Dec. 15, according to Tuesday’s announcement. Nearly $2 billion worth of products were removed from the combined lists including bibles and shipping containers.
U.S. stocks surged on the news Tuesday. Apple Inc. spiked as much as 5.8% and Best Buy Co. climbed as much as 11% on optimism that the reprieve would boost electronics sales in the holiday season. Apparel retailers including Gap Inc. and L Brands Inc. rose, as did toymaker Hasbro Inc. and discount chain Dollar Tree Inc.
The development was greeted in Beijing with some skepticism. Taoran Notes, a blog run by the state-run Economic Daily, wrote on Wednesday that the negotiators’ call was made on the invitation of the U.S., indicating that Trump is feeling the pressure of the tariffs.
The call sends a “positive" signal, as it showed that the two sides are still in communication, and are willing to keep in touch, it said. But whether there will be progress or not depends on the U.S.’s actions, according to the blog.
"The outside world should have no illusion on China’s positions,” the blog said. "If the U.S. sticks to the maximum pressure tactic, then its goal won’t be reached even if additional tariffs are imposed on all Chinese goods.”
©2019 Bloomberg L.P.
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