WASHINGTON, D.C. – Chinese-made furniture will continue to face 25% tariffs, according to a phase one trade agreement reached Friday (Dec 13, 2019) between China and U.S.
According to a statement by the United States Trade Representative, some $250 billion in Chinese-made goods will continue to face tariffs of 25%. This third round of tariffs, also called List 3, includes about $200 billion in products, including furniture.
Also remaining at 25% are products on List 1, representing $34 billion in goods and products on List 2, which represents $16 billion in goods. Another $120 billion in goods will face 7.5% tariffs.
Plans to place 15% tariffs on another $156 billion in goods starting Sunday have been dropped. This group of products included children’s high chairs, booster seats, infant walkers, bouncers and swings and play yards.
According to the USTR, the deal reached between both countries requires structural reforms and other changes to “China’s economic trade regime in the areas of intellectual property, technology transfer, agriculture, financial services, and currency and foreign exchange.”
It also includes a commitment that China will make “substantial additional purchases of U.S. goods and services in the coming years.”
Tweeting about the phase one deal, President Trump said, “We have agreed to a very large Phase One deal with China. They have agreed to many structural changes and massive purchases of Agricultural Product, Energy, and Manufactured Goods, plus much more. The 25% tariffs will remain as is with 7 1/2% put on much of the remainder…”
“The Penalty Tariffs set for December 15 will not be charged because of the fact that we made the deal,” he continued. “We will begin negotiations on the Phase Two Deal immediately, rather than waiting until after the 2020 Election. This is an amazing deal for all. Thank you!”
Other government officials also praised the agreement.
“President Trump has focused on concluding a Phase One agreement that achieves meaningful, fully enforceable structural changes and begins rebalancing the U.S. China trade relationship,” United States Trade Representative Robert Lighthizer said. “This unprecedented agreement accomplishes those very significant goals and would not have been possible without the President’s strong leadership.”
“Today’s announcement of a Phase One agreement with China is another significant step forward in advancing President Trump’s economic agenda,” added Treasury Secretary Steven Mnunchin. “Thanks to the president’s leadership, this landmark agreement marks critical progress toward a more balanced trade relationship and a more level playing field for American workers and companies.”
Industry analyst Jerry Epperson of Mann, Armistead & Epperson had predicted that China and the United States would reach a substantive trade agreement before the end of the year, but the “Phase One” deal is not what he had in mind.
“The more I learn the more I am not sure an important deal is really there, and not just because there wasn’t any firm news in the ‘much-speculated, nothing-is-clear’ pronouncements on TV and in the early press coverage,” Epperson said in an e-mail. “To me, it is like the parties met and said nothing really important was going to get done any time soon, so let’s create a theoretical ‘Phase One’ and have it be broad and without addressing the really tough issues, but word it so that Wall Street will see it as a first step promised all year, and finally fulfilled.”
He felt the Phase One announcement was more for headlines than any real resolution, noting that the furniture industry got no relief from tariffs.
“Was the 25% tariff removed? Not really,” he continued. “Some categories got a break to 7.5% like men’s vests, some electronics and of greatest importance, toys. The big thing was the threatened additional tariffs were not implemented. So something that never happened, still won’t happen. … To me, what I hoped would be accomplished really didn’t happen. And from watching Wall Street today, it doesn’t feel we have much of a trade agreement either.”