Today, President Trump and the Chinese government announced a “Phase 1 Deal” and suspended the proposed increase in tariffs for products (on Lists 1, 2, and 3) that were set to begin on October 15. The scheduled tariff was set to increase from 25 to 30 percent on $250 billion worth of Chinese imports. In exchange, the Chinese government will buy $40-50 billion worth of American agricultural goods, and the agreement will include terms on both intellectual property rights and financial services.
The deal will take about three to five weeks to write (and is only effective when written and signed) and is scheduled to finalize mid-November. Here is a full video of the President’s announcement.
President Trump is looking forward to meeting with Chinese leader Xi Jinping at November’s Asia-Pacific Economic Cooperation leaders’ summit. “We are very close to ending the trade war,” remarked President Trump.
In August, the Office of the U.S. Trade Representative sought public comments on this proposed increase, which would affect the following:
- 818 tariff subheadings with an approximate annual trade value of $24 billion (list 1 goods)
- 279 tariffs subheadings with an approximate annual trade value of $26 billion (list 2 goods)
- 5,733 tariff subheadings with an approximate annual trade value of $200 billion (list 3 goods)
- Lists 1, 2, and 3 total $250B together
However, no announcement was made on the suspension of already existing tariffs (or the List 4A tariffs scheduled to begin on October 15 and December 15 respectively for 300B worth of goods). The tariffs on goods subject to List 1, 2, and 3 is set to remain at 25%.
For background information on China Tariffs and numerous ways to mitigate the effect of the China tariffs, check out our previous blogs. Diaz Trade Law has assisted clients in assessing their best options to prepare or mitigate the China tariffs and submitted comments and exclusions. Our Customs and International Law attorneys are available at 305-456-3830 or email@example.com.