The deal is still tentative, and subject to President Trump’s approval.
Essentially, the deal would provide considerable relief on tariffs applied to Chinese imports. The U.S. would reportedly suspend the planned tariff hike set for Oct. 15, which calls for an increase on Tranche 3 imports from 25 percent to 30 percent, and could also include tariffs set to be implemented on Dec. 15 on the balance of Tranche 4 goods not already taxed.
The agreement is believed to lay the groundwork for follow-up talks to resolve the greater issues between the two countries, which concern accusations that the China has been guilty of stealing intellectual property assets from U.S. companies. Supposedly, there’s an agreement governing IP assets, but no further details were made available. Moreover, the parties still need to meet to hammer out the final details of the overall agreement before it can be signed, which is expected around mid-November.
Jennifer Safavian, executive vice president of government affairs at the Retail Industry Leaders Association, said, “Suspending the Oct. 15 tariff increase is welcome news for retailers, consumers and the global economy. The administration knows that the trade war and specifically the harmful tariffs are weakening the U.S. economy, hurting manufacturers and causing consumers to pay more for everyday items like shoes, sweaters and sporting equipment.
“Relief from the anticipated tariff increase is appreciated,” Safavian continued, “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.”
David French, senior vice president for government relations at the National Retail Federation, hailed the phase-one deal as an important step forward and, it’s hoped, the first of many.
“Retailers are encouraged by the progress made between the United States and China and are pleased that the administration has listened to the concerns of the business community as the trade war takes an increasing toll on the American economy,” French said. “The decision to delay planned tariff hikes is welcome news to U.S. retailers and consumers heading into the busy holiday shopping season.
“Although this is a step in the right direction, the uncertainty continues,” he added. “We urge both sides to stay at the negotiating table with the goal of lifting all tariffs and fundamentally resetting U.S.-China trade relations.”
The American Apparel and Footwear Association (AAFA), however, sounded a note of caution and urged the industry to continue pressing toward a full resolution of the trade dispute, especially with holiday shopping set to begin in earnest in the weeks ahead.
“While we welcome the President’s decision to withhold an additional tariff increase on many of our products, the reality is that everything currently being hit with punitive tariffs is still being charged,” Rick Helfenbein, AAFA president and CEO, said. “This means Americans are still being burdened with an additional 25 percent on backpacks, handbags, luggage, hats, and gloves. It also means that 92 percent of our clothing, 53 percent of our shoes, and 68 percent of our home textiles imported from China continue to be charged an additional 15 percent tariff. These rates are on top of the hefty tariffs already being charged on these products.”
Time’s up for discussions to continue without bringing the tariff war to a close, Helfenein said.
“As we have said throughout this trade war, we do not believe continuing to tax Americans gives us leverage at the negotiating table with China,” he said, adding that it’s “past time that these misguided tariffs were removed.”
“The continued costs and uncertainties associated with this tariff policy,” Helfenbein stressed, “mean the Grinch still has stolen our Christmas.”
News of a partial deal was first reported by Bloomberg.