Markets

Trump halts new China tariffs and rolls back some of the prior duties on $120 billion of imports

Key Points
  • "The 25% Tariffs will remain as is, with 7 1/2% put on much of the remainder," Trump tweets.
  • The USTR confirmed that the U.S. will be maintaining 25% tariffs on approximately $250 billion of Chinese imports while reducing tariffs on $120 billion worth of goods to 7.5%.
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President Trump tweets the US agreed to 'very large Phase One' deal with China on trade

President Donald Trump said Friday that as part of the U.S.-China trade deal, Washington will not charge Beijing with any new tariffs and will slightly reduce existing ones.

He also said that at Beijing's request, "phase two" talks with China will begin immediately rather than waiting until after the 2020 election.

The Office of the United States Trade Representative confirmed that the U.S. will be maintaining 25% tariffs on approximately $250 billion of Chinese imports while reducing tariffs on $120 billion in products to 7.5%.

In a tweet, the president wrote: "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 ...

"...The Penalty Tariffs set for December 15th will not be charged because of the fact that we made the deal," he added. "We will begin negotiations on the Phase Two Deal immediately, rather than waiting until after the 2020 Election. This is an amazing deal for all. Thank you!"

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The USTR's office added that the "phase one" agreement struck between the U.S. and China also includes a commitment by Beijing to make "substantial" purchases of American goods in coming years.

China's Vice Minister of Agriculture and Rural Affairs Han Jun confirmed the country would increase its purchases of agricultural goods but declined to specify how much. The deal also involves intellectual property, technology transfers, agricultural goods, financial services and expansion of trade, Chinese officials said.

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US-China reach Phase I trade agreement—Three experts on what it means for markets

"President Trump has focused on concluding a Phase One agreement that achieves meaningful, fully-enforceable structural changes and begins rebalancing the U.S.-China trade relationship. This unprecedented agreement accomplishes those very significant goals and would not have been possible without the President's strong leadership," United States Trade Representative Robert Lighthizer said in a release.

The United States first imposed tariffs on imports from China in January 2018 and based its sanctions on what it argued were illegal acts, policies, and practices related to technology transfer, intellectual property and innovation.