The U.S. and China Reach “Phase One” Trade Deal

On December 13, 2019, the United States Trade Representative (USTR) announced a “phase one” trade agreement with China. Until further notice, the U.S. will suspend the additional 15-percent tariff on List 4B goods imported from China that was scheduled to take effect on December 15, 2019.  The official Federal Register notice of suspension of the List 4B tariffs is scheduled to be published on December 17, 2019.
The December 13 announcement further stated that the U.S. plans to maintain the 25-percent tariffs imposed on List 1, 2 and 3 goods imported from China and will reduce the tariffs on List 4A goods from 15 percent to 7.5 percent.  According to a press interview with USTR Robert Lighthizer, the planned tariff reduction will take effect 30 days after the agreement is signed; the goal is to formally sign the deal in the first week of January 2020.
China has also released its plans to suspend additional tariffs scheduled to take effect on December 15, 2019. The suspension covers the 10-percent or 5-percent additional tariffs on certain imported products from the U.S.  Furthermore, China will continue to suspend its additional tariffs on U.S.-made vehicles and auto parts.
Despite the planned tariff reduction, the USTR will continue to accept List 4A exclusion requests through the online portal, with a final deadline of January 31, 2020.  Companies wishing to file a product exclusion petition and otherwise explore strategies to maximize duty savings should contact a BDO Customs and International Trade Services professional.