January 17, 2020
The signing this week of the “Phase One” agreement between the United States and China is a major initial step in the trade talks between the two countries and will result in some tariff relief for goods imported from China. However, most of the additional tariffs will remain unchanged pending further trade discussions.
The agreement sets in place a tariff rate reduction for goods listed on Round 4A of the Section 301 tariffs on Chinese goods. Effective February 14, 2020, these additional tariffs will decrease from 15 percent to 7.5 percent. This rate reduction will apply to goods entered or withdrawn for consumption on or after the effective date, but will not be retroactive.
Progress in this agreement was also the catalyst for the suspension of the Section 301 tariffs for items in Round 4B, which was previously scheduled for implementation on December 15, 2019.
To secure “Phase One” China has agreed to meet certain targets for purchases of United States agricultural products, manufactured goods, as well as oil and gas products. There are also targets for purchases of United States financial and other service products. Future talks will have to tackle China’s subsidies, which protect their markets from imported goods and technology transfer policies that have been at the forefront of the trade dispute.
The official announcement and the Round 4A list can be found at the following links.
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