Tentative Tariff Truce Reached Between US & China for Tech
The media outlets here in the US have been spouting off the past few weeks over whether or not President Trump and Jinping would be able to reach an agreement over the trade war that has been raging with little resolution to this point. If no resolution was reached, the US planned to hike the tariff rate from 10 percent to 25 percent on January 1, 2019.
The trade war has been raging on most, if not all, imported good from China so China has retaliated by raising tariffs on products sent to China from the United States.
Both sides sat down face-to-face this week in Argentina during the 2018 G20 Summit in Buenos Aires, Argentina to discuss possible solutions so that both sides can feel they have benefited. Americans were afraid that tariffs would be raised on tech like Apple products that most of us are fairly addicted to. US government officials had gone on record late last week saying that Americans could afford a 10 percent increase on Apple products in the event tariffs needed to be raised.
During the sit down, both sides agreed to a truce that will give more time to negotiate for the next 90 days without the tariffs being raised on imported goods. The issues most being discussed right now for tech are intellectual property (IP) and patents. Supposedly, 90 days is the cut off point. If a deal cannot be hashed out in the next 90 days, tariffs will go up and the trade war continues.
As part of this discussed truce, China has agreed to buy a “very substantial” amount of goods to include industrial goods and energy.
The postponement for these tariffs won’t impact every category of goods. Hopefully this tariff postponement will not impact the products that Americans are looking to purchase over the holiday season because holiday sales are what finally bring most companies into the black for the year.
Farmers and growers have already been impacted by the trade war and haven’t been able to sell their crops so they have had to store them possibly long term until this trade war is worked out. Some have gone out of business already because the past few years haven’t been profitable for them. The industry is struggling so the hope is that they may not have to struggle much longer.
Do you think that tech prices will go up during or right after the holidays? Will the trade war end or will tariffs increase in 90 days? What will it take to come to an agreement between the US and China? I would love to hear your thoughts!