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US And China Reach Phase 1 Deal

The reduction of tariffs to 7.5 percent on products on list 4a and the cancellation of tariffs on list 4b are an important start, according to MEMA, but the association encourages the administration to review the 25 percent tariffs still in place on $250 billion of goods.

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From MEMAWashington Insider

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MEMA has stated it is encouraged by the news that the administration reached a “Phase One” trade agreement with China. The reduction of tariffs to 7.5 percent on products on list 4a and the cancellation of tariffs on list 4b are an important start, according to MEMA, but the association encourages the administration to review the 25 percent tariffs still in place on $250 billion of goods. In many cases, these tariffs are causing financial strain on suppliers throughout the U.S.  

The Office of the United States Trade Representative announced an agreement on a “Phase One” deal with China that will alleviate some tensions in trade relations between the two countries.

The deal, according to a press release published by the USTR on Dec. 13, “requires structural reforms and other changes to China’s economic and trade regime in the areas of intellectual property, technology transfer, agriculture, financial services, and currency and foreign exchange. The Phase One agreement also includes a commitment by China that it will make substantial additional purchases of U.S. goods and services in the coming years. Importantly, the agreement establishes a strong dispute resolution system that ensures prompt and effective implementation and enforcement.”

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As part of the deal, the U.S. has decreased some of the tariffs that it had initially imposed on China as well as cancel plans to place tariffs on $156 billion of imports. The USTR states that the U.S. will continue to impose 25 percent tariffs on about $250 billion and 7.5 percent tariffs on approximately $120 billion worth of Chinese goods. Many of the parts are imported by motor vehicle suppliers are included in the $250 billion lists that remain at a 25 percent tariff rate.

MEMA said it applauds the work both parties have invested to reach this point and urges them to continue working toward future agreement. “We have repeatedly called for an agreement between the U.S. and China that will allow U.S. companies to remain competitive in a global marketplace while protecting intellectual property (IP) rights. It is our hope that this positive step has begun to address this long-term problem,” MEMA stated.

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