On October 11th, the U.S. announced a major step forward in the escalating trade dispute with China – that a “substantial” Phase 1 deal has been agreed to covering intellectual property, financial services, and the sale of American agriculture products.
While there is doubt as to the full scope of this initial agreement, the U.S. president did announce the cancellation of a scheduled October 15th tariff hike from 25 percent to 30 percent on $250 billion worth of imports from China (Lists 1, 2, and 3) in exchange for the purchase of $40-50 billion worth of American goods.
For importers, this provides a brief respite as retailers gear up for seasonal holiday shipping and hope for ocean carriers that have been seeing slacker volumes on a typically bustling Trans-pacific trade. But until a deal is written and signed, which could happen as soon as November 16-17 at the Asia-Pacific Economic Cooperation (APEC) Meeting, shippers should be watchful of the next tariff deadline – on December 15th, a new 15 percent tariff is planned to cover $160 billion of imports from China – unless additional progress is made.
“Washington should appreciate by now, that no matter how much pressure it applies, Beijing will by no means surrender China’s development path by giving in to the unreasonable broad deal Washington is so gun-boatedly trying to engineer.
A partial deal is a more feasible objective, and one that would be in the common interests of both sides. Not only would it be of tangible benefit by breaking the impasse, but it would also create badly needed breathing space for both sides to reflect on the bigger picture than who does what to please the other.”
“Relief from the anticipated tariff increase is appreciated, but only a long-term agreement will alleviate the uncertainty inflicted by the trade war. We are encouraged by the reported productive tone of the U.S.-China talks and will continue to press the administration for a comprehensive trade deal that ends the tariffs on all product lines.”
RETAIL INDUSTRY LEADERS ASSOCIATION
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