15:48 | 17/12/2019 Global Economy
The phase one trade deal between China and the United States, which holds off a planned US tariff increase on billions of dollars of Chinese imports previously set to take effect on Sunday, was welcomed by US business groups. But they urged the removal of all additional duties as well.
|Containers of Chinese goods unloaded at Long Beach Port in Los Angeles, the US|
Beijing and Washington announced the deal on Friday. China said the two sides had agreed that the US will fulfill its commitments to phase out additional tariffs on Chinese products.
The US has dropped plans to impose new tariffs on $160 billion in Chinese-made consumer goods, including laptops, smartphones and clothing, and cut in half tariffs imposed in September on another $112 billion to 7.5 percent. But it will continue to levy a 25 percent import tax that started last year on $250 billion in Chinese goods.
State Councilor and Foreign Minister Wang Yi said the deal is bullish news for the world.
At a joint news conference on Saturday with Miro Cerar, Slovenia's deputy prime minister and foreign minister, Wang remarked that China has always been opposed to settling economic and trade disputes by imposing tariffs because there is no winner in a trade war. China also rejects the use of unilateral pressure, as it violates the rules of the World Trade Organization, he said.
The wording of the phase one agreement was settled after rounds of back-and-forth negotiations, Wang noted.
The agreement is conducive to gradually bringing China-US economic and trade relations back to a normal development track and will inject confidence into world economy facing downward pressure, he said, adding that it will also help to stabilize the global trade order.
"The tariff relief included in the phase one deal is welcome and could be a sign that the end of the trade war is in sight," said Rick Helfenbein, president and CEO of the American Apparel & Footwear Association.
However, Helfenbein noted, US businesses, consumers and workers are still being hammered by tariffs imposed by the US and by China's retaliatory tariffs on incoming US goods.
"The trade war is a self-inflicted wound that has caused a lot of pain for America. The sooner these tariffs are eliminated, the better. And we won't stop pressing our case until this happens," he said in a statement.
Americans for Free Trade, a coalition of more than 150 business groups from every sector of the economy — which are united in the fight against tariffs — said the rollback of tariffs and cancellation of new levies is a small step forward.
"However, the tariffs still in place are a tax that Americans, and not China, continue to pay, to the tune of tens of billions of dollars," the coalition's spokesman Jonathan Gold said. "By only reducing the tariffs on a few items, the administration is picking winners and losers in this trade war."
People in the US have paid an additional $42 billion in tariffs since the beginning of the trade war in early 2018 through October this year, including an additional $4 billion in October alone, the coalition said in a statement on Friday after the announcement of the deal.
"That's why we urge the administration to continue to work diligently to come to a final agreement with China that will remove all the tariffs currently in place," Gold said.
The US Chamber of Commerce said the phase one agreement creates "greater certainty" for US businesses as they plan for the year ahead, after months of uncertainty.
"We call upon both governments to continue working diligently toward a final agreement within six months," Myron Brilliant, the chamber's executive vice-president and head of international affairs, said in a statement.
Another US industrial group, the National Retail Federation, also underscored the need to eliminate all the remaining tariffs.
"Tariffs create uncertainty and costs for American retail supply chains, and the trade war won't be over until they are eliminated completely," said David French, the group's senior vice-president for government relations.