U.S. and China Trade Talks
The United States and China resumed trade talks in Washington on Wednesday, January 30, 2019. Vice Premier Liu He, suggested that President Trump meet with President Xi in late February after Mr. Trump’s planned summit with North Korean leader, Kim Jong Un.
In a tweet Thursday morning, Trump wrote, “no final deal will be made until my friend President Xi, and I, meet in the near future to discuss and agree on some of the long standing and more difficult points.”
The Chinese delegation led by Mr. Liu presented some concessions for the trade talks, including more Chinese purchases of U.S. farm and energy products and more American capital in the financial-services and manufacturing sectors. The two countries are still far from a deal.
Many business groups have been pushing the White House to insist on significant changes in Chinese technology and industrial policies. Trump tweeted, “looking for China to open their Markets not only to Financial Services, which they are now doing, but also to our Manufacturing, Farmers and other U.S. businesses and industries.”
Some of President Trump’s advisers believe he will be under enormous pressure not to increase the tariffs on Chinese goods from 10% to 25% on March 2. The expectations for a deal will be so large that any negative outcome would hit markets globally, affecting both economies. U.S. Trade Representative Robert Lighthizer, top negotiator with China, has argued to keep tariffs in place to keep the pressure on China.
As a result of the pending increase in duties, there has been less available space on vessels as importers are shipping goods early to avoid additional duties. This is referred to as “rolling” (the act of rolling the cargo to the next vessel or the one after that), when cargo is sitting awaiting available space.
As a reminder, Lunar New Year will begin on February 5, 2019. Lunar New Year is generally accompanied by ten days of silence from your suppliers, agents, and partners in China. It is a major holiday in China, which is why communication declines so precipitously. This time may cause challenges for importers worldwide doing business with China.
There is no guaranteed remedy but planning ahead can reduce risk and cost. We advise importers to plan at least two weeks for bookings and another week for ETA in case there are any delays. There is usually a few weeks after Lunar New Year when congestion is high, so plan accordingly.
For more information, please contact your Krieger Worldwide representative.