On Thursday, Sino Minister of Commerce spokesman Gao Feng said that China and the United States have hit an important milestone in their ongoing trade talks. The representative explained that a condition of a new trade deal would include a gradual phasing out of trade war-related tariffs. Gao also said that the import tax de-escalation is dependent upon the forging of a phase one trade pact.
In a press conference, Gao said that negotiators from the two superpowers made a tentative agreement in the last two weeks. “If China, U.S. reach a phase-one deal, both sides should roll back existing additional tariffs in the same proportion simultaneously based on the content of the agreement,” noted the spokesman.
On Sunday, U.S. Commerce Secretary Wilbur Ross said in an interview, that a trade agreement is close to being signed.
China has also recently taken steps indicating a willingness to end the trade war. Earlier this week, the Sino superpower issued harsh sentences to a local group of convicted fentanyl smugglers. The Trump administration has named the flow of the drug from China into America as a critical trade negotiation issue.
Furthermore, Xinhua, China’s state-run news service, has reported that the nation’s General Administration of Customs and Ministry of Agriculture are looking into removing restrictions on the import of American poultry.
In January 2018, President Trump introduced the first of many import taxes on Chinese made goods. The Commander-in-Chief took action to correct perceived unfair trade practices on the part of the Sino superpower. Beginning with new tariffs on solar panels and washing machines, Washington’s new levies now apply to most goods brought in from the Communist nation.
In retaliation, China has implemented its own series of tariffs and limited the import of U.S. agricultural products.
Trade War Impact
Over the last two years, the Sino-American trade war has significantly escalated. Notably, the Trump administration disrupted the U.S. technology industry by blacklisting Chinese conglomerate Huawei in May. Though the firm’s profitability hasn’t been severely negatively impacted, various U.S. companies have suffered.
Several American semiconductor makers and software developers lost significant revenue because they had to end their business relationships with Huawei.
Indeed, in July, executives representing Google, Intel, and Qualcomm petitioned the White House for exemptions to the Huawei trade ban. However, despite receiving over 130 requests, the U.S. Department of Commerce has not granted a single license.
In August, a one-day trade war flare-up cost Alphabet, Amazon, Apple, and Microsoft a combined $162 billion in value.
The U.S. currently plans to impose a 15 percent tariff on a host of consumer electronics in December. As such, an eminent Sino-American trade war armistice would be ideal for consumers and the tech industry.