After the 16-month standoff between the U.S. and China, it appears tensions are finally settling. In fact, China and the U.S. has agreed to start canceling the tariffs that are currently in place. They will do it in phases, effectively ending the trade war. There was no specific timetable laid out, but negotiations are still ongoing.
Part of this deal would no doubt be to scrap current plans for additional tariffs in December. Trump pledged to tariff an additional $156 billion in Chinese goods by December 15th if a new deal wasn’t made. Those tariffs would be placed on items we buy and use every day, like toys, phones, and computers.
Chinese Commerce Secretary Gao Feng said that both sides cancelling tariffs had to be part of any ongoing negotiations. If both sides are agreeing to cancel tariffs, that only bodes well for future negotiations. It also means prices will begin to ease a bit. These tariffs are often a tax placed on goods that are passed down to the consumer.
This is also great news for consumer excitement going into the holiday shopping season. Many economists were worried about how the trade war would impact enthusiasm. So far, enthusiasm has remained strong and the economy is still roaring.
“The trade war started with tariffs, and should end with the cancellation of tariffs,” Gao told a regular news briefing.
Tariffs Will Be Canceled by Both Sides
China says the deal will only work if the two sides cancel out an equal number of tariffs. They can negotiate together to decide what that number should be, but it has to be equal.
“Both sides have agreed to cancel additional tariffs in different phases, as both sides make progress in their negotiations,” Gao said. “In the past two weeks, the lead negotiators from both sides have had serious and constructive discussions on resolving various core concerns appropriately.”
China also isn’t above kind gestures and reaching out to the U.S. They’ve also announced they plan to remove restrictions on U.S. poultry. This would be a massive boost to that the industry. It is also great optimism for U.S. agriculture that has been majorly hit by the tariffs. China banned all U.S. eggs and poultry back in 2015 as a result of the avian flu outbreak.
As of right now, stocks are surging upward at this news. It looks more and more likely that a new trade deal will be signed between the two country’s presidents when they meet next month.
