This past Friday the White House announced that in return for a postponement of tariff increases that were set to come this week – China would be pursuing an increase in changes as well as revisions to currency and intellectual properties regulations. That being said, nothing is set in writing or official mutual accord. Furthermore, Turkey’s steel commodities have also been hit with tariff hikes as negotiations talks have stalled. This means that the last quarter of 2019 and 1st quarter 2020 can still be subject to further tariff increases and instability.
Here are some quotes by experts regarding the matter.
Regarding whether or not the holds on tariffs are a sign that tariffs won’t increase:
“I have every expectation if there’s not a deal those tariffs would go in place,”
Gary Shapiro on what effect the tariffs will have on U.S. businesses:
“US businesses will continue to struggle under the burden of tariffs and uncertainty in supply chains,” said Gary Shapiro, the president and chief executive of the Consumer Technology Association.
Regarding the Steel Tariffs imposed on Turkey:
“The sanctions are ineffective and they know they are ineffective,”
said Sebastien Galy, senior macro strategist at Nordea Asset Management in Luxembourg.
The Consumer Technology Association released a press release. Here is an excerpt:
The tariff delay on $250 billion worth of Chinese goods is welcome news for American businesses and consumers – but a one-step-forward, two-steps-back approach means U.S. businesses will continue to struggle under the burden of tariffs and uncertainty in supply chains… (source: Gary Shapiro). In August, U.S. consumer tech paid an additional $1.8 billion in tariffs, including over $124 million in tariffs on products critical to 5G deployment according to new data from CTA, compiled and analyzed by The Trade Partnership. Since July 2018, Section 301 tariffs on China have cost the U.S. consumer technology almost $14 billion, including over $1.3 billion on 5G-related products alone.
The Chicago Tribune added the following:
Friday’s announcement was “a nothing-burger,” said Scott Kennedy, who analyzes China’s economy at the Center for Strategic and International Studies… The only thing that happened Friday was that the U.S. delayed the tariff U.S. Sen. Chuck Grassley , Republican of Iowa, a state hard hit by loss of soybean and pork sales to China, said he welcomes news that progress may have been made in some areas of the trade dispute with China…”
All in all, despite the tariff delays – uncertainty still lingers. The future is impossible to predict so our mission becomes clear for the next 2 to 3 quarters: offer options that result in flexibility for our clients. Flexibility is now, more than ever, a valuable resource. And we’re proud to say that our services and their structure are built around exactly that. We are an ideas company. We work with our clients to find the most optimal solutions for their supply chain needs.
All in all, as of now – it seems as if, despite the holds, the issues have been delayed more so than resolved.