December 3, 2018
The U.S. and China agreed yesterday to hit the pause button in the current trade war. The 10% tariffs on $250 billion worth of Chinese goods which were scheduled to jump to 25% at the end of this year will now remain at 10% for an additional 90 days.
President Trump agreed to the 90 delay in implementation of the tariff increases and Chinese President Xi Jinping agreed to increase the importation of U.S. industrial, agricultural and energy products while the two sides engage in further negotiations on the substantive trade issues have been problems for a long time. It was not clear how the Chinese agreement to increase U.S. imports will be accomplished (i.e through tariff reductions or some other means).
This is welcome news and hopefully will result in more than a mere 90 day reprieve for American importers and farmers who have major exports to China. The basic gap in agreement on serious issues such as intellectual property, market access and trade policy is still large and the looming 90 day extension is not a long time in which to address these serious issues. However this does show what is possible when the two key leaders want to get something done.
We, along with the rest of the world, will be watching this closely and keep you informed on any further developments.