The two sides have been working to complete an initial trade deal for Presidents Trump and Xi Jinping to sign. It was originally reported that this signing would take place at the now cancelled Asia-Pacific Economic Cooperation summit in mid November.
While the cancellation of the summit has caused some doubt the signing will take place, the Trump administration and Chinese officials in Beijing both believe they will find a way to reach an agreement sometime in November.
The tentative U.S.-China deal, is said to include China making concessions on intellectual property, financial services and agriculture. In return, the U.S. agreed not to implement new tariffs (Oct. 15, 2019) on Chinese goods which were slated to increase items in List 1, List 2 and List 3 from 25% to 30% tariffs.
Current 25% Tariffs
As a review, here is a breakdown of GCP brands and products currently impacted by the 25% tariff.
- Premlene Sheet Rubber & Engineered Structures
- National Silicone (Solid & Sponge Silicone)
- Rubatex Sponge Rubber
- Ceramic Tiles
- Clamps (Worm Gear and RC), Couplings (Shielded and No Hub) and Shear Bands
- Hose (Rubber, PVC & TPU) with and without fittings
The materials above were set to increase to 30% on October 15, 2019, but given the announcement of a phase one deal their increase has been put on hold. These items will remain at 25% unless a Federal Register notice is published announcing an increase. There is no such notice at this time.
As we have done in the past, we will continue to help manage the impact felt by our customers from these tariffs. To date we have not passed the full amount of these tariffs through to any customer.
New 15% Tariffs
List 4A tariffs (15%) implemented Sept 1, 2019 now effect the following GCP product:
- PVC Couplings
This item will remain at 15% unless a Federal Register notice is published announcing an increase. There is no such notice at this time.
Given all that has transpired it is impossible to know how this situation will play out. However, that does not mean we are sitting idly by. We have started to build the business case for every eventual scenario, tariffs decrease, tariffs increase, or stay the same. This scenario planning is something Gary and George took with them to discuss with our factory partners during their October trip. In partnership with our key vendors here are the production locations currently being explored:
- Premlene Sheet Rubber – Thailand, India, Vietnam, USA and Canada
- Premlene Engineered Structures – Taiwan
- National Silicone – USA and Canada
- Rubatex Sponge Rubber – Korea
As always we will do what’s best for supporting our customers and our business by supplying high performance, cost competitive materials. In the meantime, we are available to answer any questions you might have. We appreciate your continued partnership through these changes.
The GCP Team