The USA has agreed to suspend the increase of tariffs on USD200 billion worth of Chinese goods, which was scheduled to enter force on January 1, 2019, as the two nations take a step towards the development of a longer-term trade accord.
The latest round of tariffs, which target the third list of Section 301, was originally scheduled for a two-phase implementation. The first phase, which went into effect during September, placed a 10 percent tariff on goods contained in the third list of section 301.
The latest agreement between the USA and China has delayed the second phase of tariffs, which would have increased this rate to 25 percent.
This phase has now been suspended for 90 days. In this time, it is expected that the two nations will continue to work on the details of a trade accord. If at the end of this period the parties are unable to reach an agreement, the 10 percent tariffs will be raised to 25 percent.
The announcement has been welcomed by the American Association of Port Authorities (AAPA), which described the agreement as encouraging news that highlights the progress that is being made in trade negotiations.
AAPA president and ceo Kurt Nagle said: “With today’s worldwide supply chain, American manufacturers, farmers and businesses rely on our nation’s ports to handle the raw materials and semi-finished components needed for domestic production of goods, including goods made here for export.
“Not only do high import tariffs cost Americans more to purchase the things they need and want on a daily basis, reciprocal trade sanctions from our trading partners can increase the cost and thereby reduce demand for US exports, such as agricultural products, vehicles, machinery and mineral fuels.”