Trump Had to Walk Back Existing Tariffs for “Phase One” Deal
Just like China said he would need to
The 15% tariff imposed on $120 billion in Chinese goods in September will be halved to 7.5%:
In a statement issued Friday, the Office of the U.S. Trade Representative (USTR) called the deal a “historic and enforceable agreement” and said the U.S. agreed to modify its tariff actions “in a significant way.”
The U.S. will maintain the 25% tariffs on about $250 billion of annual Chinese imports it imposed during the 18-month trade war, the USTR said. But it will halve the tariffs on an additional $120 billion of Chinese imports to 7.5%, the USTR said. China retaliated with similar measures.
Trump is bigging the deal as “very large” securing “massive purchases” and “many structural” changes by the Chinese.
We have agreed to a very large Phase One Deal with China. They have agreed to many structural changes and massive purchases of Agricultural Product, Energy, and Manufactured Goods, plus much more. The 25% Tariffs will remain as is, with 7 1/2% put on much of the remainder….
— Donald J. Trump (@realDonaldTrump) December 13, 2019
The reality is that deal is not yet formalized, much less signed, and that we know virtually nothing about the terms, except that China will restore some purchases of American meat that it desperately needs anyway, and the US will modestly scale back tariffs which primarily hit US consumers the votes of which Trump is competing for.
Trump initially advertised he would get concessions simply for not implementing more tariffs on his voters, but China stayed true to its word of not even a phase one deal without Trump climbing down on existing tariffs:
Beijing’s priority in any phase one trade deal with the United States is the removal of existing tariffs on Chinese goods, China’s Global Times newspaper said on Sunday, amid continued uncertainty on whether the two sides can strike a deal.
“Sources with direct knowledge of the trade talks told the Global Times on Saturday that the U.S. must remove existing tariffs, not planned tariffs, as part of the deal,” said the report.
Global Times, published by the official People’s Daily newspaper of China’s ruling Communist Party, also cited another unidentified source close to the talks as saying U.S. officials had been resisting such a demand because the tariffs were their only weapon in the trade war and giving up that weapon meant “surrender.”