It’s been a long, winding journey since March 22, 2018 when President Trump announced the first round of tariffs on Chinese imports. Nevertheless, the good news on Wednesday is we got to see the completion of the first comprehensive agreement between the two countries. U.S. President Donald Trump and Chinese Vice Premier Liu He signed the Phase One trade deal at the White House on January 15, 2020.
As part of the deal the U.S. have agreed to cut tariffs on some Chinese goods in exchange for Chinese pledges to purchase more of American farm, energy and manufactured goods. In addition, China will address U.S. complaints about intellectual property practices.
In regards to tariffs, the United States has approved a roll back of the imposed Sept 1. tariff list. Meaning, a $120 billion dollars worth of Chinese goods will decrease from 15% to 7.5% duty. Specifically for GCP, our only product line which falls under this list is our PVC couplings.
The remaining 25% tariffs on $250 billion worth of Chinese goods stays unchanged. These could be rolled back as part of a Phase Two trade negotiation, however no details, dates or additional information has been provided. Specifically for GCP, this means our Premlene, National Silicone and Rubatex product lines maintain a 25% duty for the immediate future.
Going forward, we expect this deal to bring some relief to the trade tensions but it is clear more work is needed to achieve full cooperation between the U.S. and China. In the months to come we will be following the events closely and let you know of any new developments and how they might impact your business.
Thank you for your continued support and partnership. If you have any questions please do not hesitate to ask.
The GCP Team