As you may have heard on the media over the weekend, President Trump and Chinese President Xi reached an agreement at the G20 summit in Buenos Aires that resulted in the temporary suspension of the additional 15% duty on Chinese products imported into the US, that was set to go in effect on January 1st, 2019.
The “Section 301” ruling was released back in September, as part of the US’ continuing response to China’s abuse of intellectual property and forced transfer of American technology. This rule included the immediate assessment of an additional 10% duty on some 6000 items (List #3), including all food products that we import from China. According to this rule the 10% duty was to increase to 25% with respect to products entered into the US after January 1, 2019.
However, China has just agreed to start purchasing agricultural products from US farmers immediately and to also buy substantial amount of energy, industrial and other product from the US to reduce the trade imbalance between our countries. They have also agreed to begin negotiations “on structural changes with respect to forced technology transfer, intellectual property protection, non-tariff barriers, cyber intrusions and cyber theft, services and agriculture”, according to the joint statement of the two countries. “Both parties agree that they will endeavor to have this transaction completed within the next 90 days. If, at the end of this period of time the parties are unable to reach an agreement, the 10% tariffs will be raised to 25%”, the announcement said.