Retailers say US-China trade agreement a step in the right direction

The US National Retail Federation (NRF) has welcomed news that the North American country and China have agreed on phase one of a trade deal.

Reports indicate that the agreement cancels tariffs that were due to come into force last week and will reduce tariffs that took effect in September.

However, earlier tariffs will remain in effect.

“For the first time in months, the United States and China are moving in the right direction on tariffs, and we congratulate negotiators from both sides for the progress they have made,” NRF senior vice president for government relations David French said.

“Tariffs create uncertainty and costs for American retail supply chains, and the trade war won’t be over until they are eliminated completely. We agree that we need to realign our relationship with China, but tariffs that harm American businesses, workers and consumers are not the answer and cannot be allowed to continue.”

The Office of the US Trade Representative (USTR) said that the phase one trade deal requires structural reforms and other changes to China’s economic and trade regime in the areas of intellectual property, technology transfer, agriculture, financial services, and currency and foreign exchange.

It also includes a commitment by China that it will make substantial additional purchases of US goods and services in the coming years.  

The US will be maintaining 25% tariffs on approximately $250bn of Chinese imports, along with 7.5% tariffs on approximately $120bn of Chinese imports, the USTR said.

The news will be welcomed by the air cargo industry. Only last week IATA said that one of the major reasons for this year’s decline in air cargo volumes is the trade dispute between China and the US.