On January 15, the US and China signed a long-awaited trade deal. For the first time in over 2 years, we have interrupted the forward march of increasing duties across a wider and broader scope of products that are imported from China.
The result of this trade deal primarily affect only those goods in List 4, and inList 4A, specifically. Effective on February 14, the duties for List 4A will be reduced from the current 15% additional duty, down toonly7.5%. This is still a high premium, but these duties were planned to actuallyincreaseto 25% back in December 2019, so the combined effect is substantial.
The planned duty increase for List 4B is currently postponed indefinitely.
There are certain snap-back provisions in the trade deal that will allow any of the reduced duties to be re-started if it is felt that China is not living up the expectations stipulated in the agreement
The duties against Lists 1-3, as well as Lists 4A and 4B are now going to be the subject of a new trade agreement that could be described as aPhase Twotrade deal that will be more comprehensive and will hopefully roll all of the increased duties back entirely. This will be a difficult negotiation, to be sure, but now that some momentum has been engaged, it is hoped this will translate into real progress that may produce tangible results at least by the end of the year.
Your partners in international trade at Averitt Express will continue to keep you advised of changes we believe will be of interest to you and your business. As always, if you have questions, please let us know.