BUENOS AIRES – The U.S. and China have called a temporary truce in the trade war.
According to the New York Times, President Trump and Chinese President Xi Jinping reached an agreement in Buenos Aires that will result in a 90-day halt on tariff implementation plans. In the handshake deal, Trump promised the U.S. would hold off on the 25 percent tariffs scheduled for January 1 and China "agreed to an unspecified increase in their purchases of American industrial, energy and agricultural products."
That means both countries must reach a more concrete trade agreement in 90 days. If an agreement cannot be reached, the 25 percent tariffs are back on.
Even though many issues remain unresolved, the concession by both sides was significant. See the full NYT story.
The U.S. implemented 10 percent tariffs on an array of Chinese imports September 24. On January 1, the rate would have risen to 25 percent - affecting $250 billion worth of products.
Wood and steel items are on the list. Wood products facing a tariff include oak, beech, maple, ash, cherry, moldings, rods, particleboard, various types of plywood, doors, charcoal, corks, and stoppers, and wicker and bamboo baskets. Furniture items include bedding, mattresses, car seats, wood chairs, furniture designed for offices, kitchens, chandeliers, and lamps.
We surveyed more than 200 of our readers to find out how they are being affected by the tariffs. A total of 85 percent of survey respondents expect to raise prices in response. Editor Will Sampson will present the full findings in a webinar December 4 from 1 to 1:30 pm. Register here.
In September, China threatened to retaliate with $60 billion in tariffs of their own. Bloomberg sources said China would reject any further trade talks altogether.
If China had retaliated, the Trump Administration said it would have imposed another $267 billion in tariffs.
The U.S. first imposed a 25 percent duty that affected $34 billion in Chinese imports. A second round then applied tariffs of $16 billion. China answered back with an extra 25 percent duties on 545 U.S. products. Then the Trump Administration suggested tariffs on $200 billion worth of Chinese products.
The Administration reportedly received more than 6,000 written comments and testimony from U.S. companies and groups, including the National Hardwood Lumber Association, urging reconsideration, and saying that it could ruin their businesses. reported USA Today. As a result, 300 items were removed from the list, including child-safety furniture.
Since the summer, U.S. companies in China have reported spikes in delayed product approvals, worker visas, and licensing applications. There have also been cases of Chinese officers ordering seemingly random quarantines for certain products, and jumps in random border inspections.
Data from China’s Customs Department show the value of wood products trade between China and the U.S. fell 16 percent in March 2018. China’s imports also dropped by 5 percent, though overall first quarter showed a 9 percent increase in Chinese exports of wood products: China's imports rose 6 percent to $2.28 billion during the period, while its exports to the U.S. rose 10 percent to $3.98 billion.
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