U.S. and China Agree to ‘Phase One’ Easing of Trade Tariffs

In what promises to be an easing of trade tensions between the United States and China, on December 15th, the U.S. Trade Representative announced that the United States and China have agreed on a Phase One trade deal that requires structural reforms and other changes to China’s trade, and comes before a December 15th deadline that would have had the United States impose an additional 15 percent tariffs on some $156 billion Chinese goods that would have included computer laptops.

The Phase One agreement also includes a commitment by China that it will make substantial additional purchases of U.S. goods and services in the coming years.

However, the United States will be maintaining 25-percent tariffs on approximately $250 billion of Chinese imports, along with 7.5 percent tariffs on approximately $120 billion of Chinese imports. Among the products subject to 15-percent U.S. tariffs are printers and MFPs, and their parts and accessories. In September, the U.S. gave printer consumables a one-year tariff exemption.

Several printer/MFP companies have responded to U.S. tariffs by saying they will shift production to other countries, such as Thailand, to avoid the tariffs. U.S. President Donald Trump has stated that he may not consider removing these tariffs until 2020 or 2021.

“Technology Transfer”

One interesting part of the agreement is China’s agreement to end its long-standing practice of “forcing or pressuring foreign companies to transfer their technology to Chinese companies as a condition for obtaining market access, administrative approvals, or receiving advantages from the government.”

China has also agreed to stop supporting outbound investments that are aimed at acquiring foreign technology.

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