The two countries agreed a 90-day truce on additional tariffs.
U.S. President Donald J. Trump and Chinese President Xi Jinping at the G20 Summit in Germany in July 2017.
Credit: Official White House Photo by Shealah Craighead
At the weekend (1 December), the United States announced a 90-day cessation to additional tariffs on Chinese goods so the two countries can negotiate an end to their trade war.
The tit-for-tat trade war between the U.S. and China began in February after the U.S. Department of Commerce announced the imposition of import duties on steel and aluminium, at a rate of 25% and 10% respectively, which was then followed by several rounds of additional tariffs placed by the two countries on billions of dollars worth of each other's goods – including HVAC&R products.
These tariffs have already resulted in a price increase for HVAC&R equipment in the United States. “Many of these tariffs have forced our members to raise prices to cover the increased cost of raw materials, which is unfortunate,” Francis J. Dietz, vice-president, public affairs at AHRI, told this website in July.
The U.S. plans to increase the tariff on $200 billion worth of Chinese goods from 10% to 25% in 2019, including refrigeration equipment.
This has been postponed for 90 days, while a series of trade negotiations take place between the two countries. “President Trump has agreed that on January 1, 2019, he will leave the tariffs on $200 billion worth of product at the 10% rate, and not raise it to 25% at this time,” the White House announced in a statement.
China, which was likely to respond with its own additional rates or an increase in its list of tariffed imports from the U.S., will also cease additional tariffs.
“China will [also] 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, the statement says. “China has agreed to start purchasing agricultural product from our farmers immediately.”
“Both parties agree that they will endeavor to have this transaction completed within the next 90 days,” the White House adds. “If at the end of this period of time, the parties are unable to reach an agreement, the 10% tariffs will be raised to 25%.”