The trade relationship between the United States and China has continued to be difficult, especially after both countries announced significant new tariffs on each other’s goods in August 2019. Nonetheless, the relationship may be improving, with both countries announcing trade concessions this week and agreeing to resume trade talks in October 2019.

In August, actions taken by both countries had significantly exacerbated tensions in the country’s trade relationship. On August 1, 2019, for example, President Trump announced that, effective September 1, 2019, the United States would impose a 10 percent tariff on $300 billion worth of Chinese goods. The President’s announcement followed unproductive trade talks between Treasury Secretary Steven Mnuchin and U.S. Trade Representative Robert Lighthizer and their Chinese counterparts.

Then, on August 23, 2019, China announced retaliatory tariffs on $75 billion in U.S. goods, to take effect on September 1, 2019 and December 15, 2019. As announced, the tariffs covered a wide variety of U.S. products, including pharmaceutical products, soybeans, automobiles, and oil. In response, President Trump increased the tariffs that have been imposed on a wide range of Chinese imports by five percent. President Trump also issued a tweet stating that U.S. companies should “immediately start looking for an alternative to China.”

This week, both countries sought to reduce tensions by offering concessions to the other. For its part, China announced that it would exempt a number of products from its tariffs, including pharmaceutical items, lubricant oil, alfalfa, and pesticides. In response, President Trump announced that he would delay the tariffs that were scheduled to go into effect on October 1, 2019 until October 15, 2019, stating he was doing so as a “gesture of good will.” Sources in the administration have rejected reports, however, that the Administration is negotiating a limited trade agreement with China.

As noted, both countries have agreed to meet in early October in Washington, D.C. Expectations for the talks are low, however, with most observers believing that the two countries will demand substantial concessions from each other that the other country is not likely to accept.