China And The US Agree Not To Impose New Additional Tariffs.
Legal News & Analysis - Asia Pacific - China - International Trade
11 December, 2018
China and the US have agreed not to impose new additional tariffs. They agreed to have wider cooperation based on mutual benefit and mutual respect during the G20 Summit in Argentina.
According to a briefing by Chinese state councillor and foreign minister Wang Yi's the two leaders had reached "an important consensus". Wang said there was a 90-day deadline for China and the US to negotiate structural reforms to China's economy, and that 10% tariffs will be raised to 25% if they don’t achieve that agreement.
The White House said that the US has agreed that the tariffs on $200 billion worth of product will remain at 10% until January 1st 2019 and that China "will agree to purchase a not yet agreed upon, but very substantial, amount of agricultural, energy, industrial, and other product from the United States to reduce the trade imbalance between our two countries".
US president Donald Trump said: “This was an amazing and productive meeting with unlimited possibilities for both the United States and China".
According to Xinhua news agency, experts said "the important meeting sends a positive signal in the development of China-US relations, one of the most important bilateral ties in the world".
Trump tweeted that China "had agreed to reduce and remove tariffs on cars coming into China from the US".
The Washington Post reported, though, that tariffs on US cars had only been raised earlier this year in response to Trump's trade war escalation.
Reuters said that many economists are being cautious about the temporary truce between the two and commenters believe that the arrest of Meng Wanzhou of Huawei could have an impact on the truce.
Early in this September, the US placed new tariffs on $200 billion of Chinese imports from 24 September and that will increase to 25% on 1 January 2019. In response China announced a levy on $60bn of US products starting from 24 September.
Rachel Turner, Shanghai-based infrastructure expert at Pinsent Masons, the law firm behind Out-Law.com, said "Uncertainty in the global economy and especially in the relationship between these two superpowers undoubtedly impacts on China including those involved in infrastructure. The reaction of the stock market is one indicator but in uncertain times decisions on non-essential investment or development can get kicked into the long grass until a clearer picture of the future can be ascertained so any truce that brings certainty is to be welcomed."
This article was published in Out-law here.
For further information, please contact:
Rachel Turner, Pinsent Masons