President Donald Trump announced via Twitter on Sunday, February 24, 2019, that he will be postponing the scheduled March 2, 2019, increase in Section 301 tariffs from 10 to 25 percent on $200 billion worth of imported Chinese products due to “substantial progress” in ongoing trade negotiations between the two countries. While the postponement is not official until the Office of the U.S. Trade Representative (USTR) publishes an announcement in the Federal Register, we are – for the first time – posting this news based on a presidential tweet due to its significance. Check in the coming days for the formal Federal Register notification. No new date for the tariff increase has been provided. Until then, here are the president’s tweets announcing the postponement:

The president’s announcement followed a weekend of extended trade negotiations involving Vice Premier Liu He of China, Secretary of the Treasury Stephen Mnuchin, USTR Robert Lighthizer and their staffs. Trump met with Liu on Friday. In comments to the press before the meeting, the president stated, “We’re having very good talks. There’s a chance that something very exciting could happen.” He added that “if I see progress being made, substantial progress being made, it would not be inappropriate to extend that deadline – keep [the tariff] at 10 percent, instead of raising it to 25 percent.” (See Trump and Trade update of September 19, 2018.) Lighthizer added, “We’ve made progress on some very important structural issues and some progress on purchases. We have a few very, very big hurdles that we still have to face, but if we make – if we continue to make progress, that would be a great outcome.”

Confusion arose during this public portion of the meeting, however, when Mnuchin and Lighthizer referred to documenting the negotiations and agreements with multiple memorandums of understanding (MOUs) that would be “binding and enforceable.” The president responded that he does not “like MOUs because they don’t mean anything. To me, they don’t mean anything. I think you’re better off just going into a document. I was never a fan of an MOU.” Lighthizer replied, “An MOU is a contract. It’s the way trade agreements are generally used. People refer to it like it’s a term sheet. It’s not a term sheet. It’s an actual contract between the two parties. A memorandum of understanding is a binding agreement between two people. And that’s what we’re talking about. It’s detailed; it covers everything in great detail. It’s just called a memorandum of understanding. That’s a legal term. It’s a contract.” The president responded, “By the way, I disagree. I think that a memorandum of understanding is not a contract to the extent that we want.” Lighthizer relented, stating, “From now on, we’re not using the word ‘memorandum of understanding’ anymore. We’re going to the term ‘trade agreement.’ All right? … No more. We’ll never use the term again. We’ll have the same document. It’s going to be called a ‘trade agreement.’ We’re never going to use ‘MOU’ again.” While Liu agreed, the exchange left many trade analysts amused and a bit confused as to the form of any final agreement between China and the United States.