Doubts over the progress of negotiations between the U.S. and China have been raised today as President Trump announced that the U.S. has not agreed to roll back tariffs as part of an agreement to end the trade dispute, contradicting statements from China’s Ministry of Commerce and several news reports. Based on recent news reports, it appeared that the United States and China had agreed in principle to gradually reduce and eliminate tariffs that have been imposed by both countries in an effort to relieve to markets beleaguered by the global economic slowdown.
In prior negotiations, China demanded that all new tariffs authorized by President Trump be eliminated prior to making any concessions. However, no official agreement to bring an end to the trade war between the U.S. and China has been signed yet. That is expected to occur sometime in November, though the time and location of the signing is still to be determined. President Trump and Chinese President Xi Jinping were originally intending to meet at the Asia-Pacific Economic Cooperation (APEC) summit in Chile, which was abruptly cancelled by the Chilean government due to the civil unrest there.
At the time of this post’s publication, there is only speculation as to how extensive the roll back of tariffs will be and which of the United States’ tariff actions will be included in “phase one” of the agreement. Phase One, expected to be signed within the next few weeks, could include eliminating September’s 15% Section 301 List 4a tariffs as one of the terms. It is also likely that Phase One of the interim truce will include an agreement to eliminate the upcoming 15% tariffs on List 4b, which are currently scheduled to take effect on December 15, 2019.
We will continue to monitor this situation and will provide future updates as additional details become available. In the meantime, please contact Husch Blackwell’s International Trade and Supply Chain team for more information.