The agreement Monday to cut tariffs between the two countries 115 percent — reducing U.S. tariffs on China to 30 percent and China’s on U.S. goods to 10 percent — “leaves tariffs higher than before Trump started ramping them up last month. And businesses and investors must contend with uncertainty about whether the truce will last,” says The Associated Press.
The deal lasts 90 days, to give time for U.S. and Chinese negotiators to reach a more substantive agreement.
But Wendy Cutler, vice president of the Asia Society Policy Institute, says three months is “an extremely short amount of time to address the range of contentious trade matters that remain between the U.S. and China, including dealing with excess manufacturing capacity, excessive subsidization of Chinese firms and transshipment efforts by Chinese companies. Similar negotiations typically take well over one year.”
Gene Seroka, executive director of the Port of Los Angeles, says 90 days is also a relatively brief time frame for companies to try to restart stopped shipments from China, given how long it can take to book space on cargo ships and move products by sea, The New York Times reports.
Many businesses delayed or canceled orders after President Trump put the 145 percent tariff on items made in China last month. Now they’re worried that a mad scramble to get goods on ships will lead to bottlenecks and increased shipping costs, says a separate AP article.
Marc Rosenberg, founder and CEO of The Edge Desk in Deerfield, Ill., invested millions of dollars to develop a line of $1,000 ergonomic chairs but delayed production in China that was to begin this month, hoping for a tariff reprieve.
Rosenberg says it's good that U.S.-China trade talks are ongoing but that he thinks the 90-day window is “beyond dangerous” since shipping delays could result in his chairs still being en route when the temporary deal ends.
“There needs to be a plan in place that lasts a year or two so people can plan,” he says.