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US-China Trade Deal Might Be Stalled Until 2020, Paving the Way for December Tariffs

The latest news on the trade war front seems to be that those in command may not call a cease fire until 2020. And that means incoming tariffs slated for Dec. 15 might still threaten the apparel and footwear sector.

Trade experts and those close to negotiations are now saying completion of the phase one trade deal President Trump and Chinese President Xi Jinping have been working toward may not happen before 2019 is up, according to reports in Reuters.

When Trump outlined elements of the phase one trade deal on Oct. 11, he said the deal could take anywhere from three to five weeks to complete, but Friday marked five weeks and negotiations appear to be more stalled than they have been in recent months. That’s due partly to a disagreement over whether the U.S. agreed to roll back in-place tariffs as part of the deal, which China claimed it had and Trump claimed it hadn’t.

Whatever the truth may be, negotiators from China are now holding firm to demands for some tariffs to be lifted in order for them to agree to the phase one deal, and Trump may be seeking greater concessions from China in order to consider removing any of the tariffs.

In comments at a cabinet meeting Tuesday, Trump’s position on tariffs had little to do with removing them.

“Look, China is going to have to make a deal that I like. If they don’t, that’s it,” Trump said. “If we don’t make a deal with China, I’ll just raise the tariffs even higher.”

With a little more than three weeks to go before Dec. 15, when tranche 4B tariffs targeting apparel and footwear are slated to roll out, whether those tariffs will disappear before they can do any damage remains uncertain.

“If the talks are really going well, that hike will be suspended,” Christian Whiton, senior fellow for strategy and trade at the Center for the National Interest, and a former Trump and George W. Bush administration adviser, told Reuters. “If not, the U.S. will implement them and that will throw the game into next year.”

More than just prolonging what has already been a protracted trade war, new 15 percent tariffs on Dec. 15 would impact popular gift items—like clothing (sweaters, outerwear, bathrobes and pajamas, included) plus footwear and other home décor items like tablecloths, blankets and bed linens—right before the holidays.