Yesterday the U.S. and China signed what is described as a Phase I agreement of improved trading relations and tariff reductions.
The deal halted the scheduled tariff increases expected last December 15th and also reduced certain tariffs on List 4 Chinese origin goods from 15% to 7.5%. Specific details of the covered items will be published in the next few days.
Tariffs on $250 billion of Chinese goods (Lists 1,2 and 3) will remain at 25% and be the subject of Phase II negotiations expected to take place as the Phase I Agreement is implemented.
The new agreement also includes provisions for Chinese reforms to protect U.S. intellectual property, stop forced transfer of technology and reduce barriers for U.S origin goods to enter China. China has pledged to increase imports from the U.S. by $200 billion including $40 billion of agricultural products and a variety of manufactured, energy (including coal), industrial, pharmaceutical, chemical, lumber and medical products over the next 2 years.
These are very positive developments for business and hopefully the beginning of a further reduction in trade tensions between the two countries. We will keep you informed of further details as they become available.