President Trump and President Xi have agreed to a truce in the current trade war which will result in the U.S. holding back on any further tariff increases in exchange for China agreeing to purchase a reported $1.2 trillion in products from the United States.
Both sides have also agreed to additional trade negotiations, and the U.S. has set a 90-day deadline to reach a broader agreement. It is worth noting, however, that China did not refer to the 90-day deadline in its domestic announcements on the agreement.
The U.S. and China will use these next 90 days to continue negotiations on structural changes with respect to forced technology transfer, intellectual property protection, non-tariff barriers, cyber intrusions and cyber theft, services and agriculture.
The latest agreement is welcome relief to those importers currently subject to 10% tariffs (List 3) which were expected to be raised to 25% at year-end but will remain at 10% at least until March 1, 2019. The agreement also removes the threat of additional tariffs on yet unspecified products for the time being.
The White House statement is available here.
Importers of merchandise on Lists 1 & 2 will see 25% tariffs remain in effect, and depending on the progress made over the next 90-days, may remain in effect for some time. Negotiators have indicated that the initial 25% tariffs could be in place for a protracted period until it is clear from any deal that China has kept its promises on structural changes.
The Administration also indicated that China expressed a willingness to reduce certain retaliatory tariffs it imposed; however Chinese statements over the weekend made no reference to such a concession.
Should you have any questions concerning the Section 301 tariffs, please contact one of the trade professionals listed here.
U.S. – China Agree to Truce & Talks