The US and China reached an agreement on a ‘Phase One’ deal to avert US penalty tariffs that would take effect on December 15. Namely, China has agreed to purchase $32 billion in additional agricultural goods during the next two years from $24 billion purchased in 2017. In addition, it will also buy more manufactured goods and energy products.
Nevertheless, despite the fact that the US has agreed not to apply the December 15 penalty tariffs, it would leave 25% tariffs on $250 billion of imports, but cut tariffs on $120 billion to 7.5%.
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Until now, the US-China trade war has significantly affected the American natural gas and oil industry through US tariffs on imports of industrial components from China as well as Chinese retaliation on US energy exports.
Such a development was welcomed by US ports, as US West Coast port authorities have repeatedly made calls urging for the trade war to end.
We’re hopeful that this is the beginning of the end to damaging trade restrictions. It’s a good sign for our shipping customers, but let’s see how it plays out. There’ll be more work ahead to get global trade flowing freely again
stated Port of Oakland Executive Director Danny Wan.
Except for the ports, the National Retail Federation (NRF) has also welcomed the news. Specifically, NRF Senior Vice President for Government Relations, David French, noted that for the first time in months, the US and China are moving in the right direction on tariffs.
Mr. French explained that tariffs create uncertainty and costs for American retail supply chains. For this reason, the US must realign its relationship with China, as tariffs negatively impact US businesses, workers and consumers.
