US-China Trade War ‘Not Likely to Be Resolved Anytime Soon,’ Says Customs Expert

The escalating trade rhetoric between the U.S. and China should make all companies “realize (if you have not already) that this is not a temporary dispute and is not likely to be resolved anytime soon,” blogged customs expert Ted Murphy with Baker & McKenzie Friday. “The two sides are doubling down and digging in.” With 2020 elections “inching closer” and China’s 70th birthday festivities set for October, “the political considerations associated with these events make it less likely that a deal will be reached,” he said. “As a result, companies should be re-examining/re-adjusting their supply chains and pursuing additional Section 301 mitigation strategies,” while taking “a view to the medium/long term,” said Murphy. “We’re doing very well with China,” President Donald Trump told reporters at the White House Friday. “We’re talking to China. We’re not ready to make a deal, but we’ll see what happens.” He left open the possibility of canceling the next round of trade talks in Washington in early September, which would be the 13th set of talks between the two sides since December. “The American taxpayer is not paying” for the Section 301 tariffs, said Trump, though virtually all business and trade groups called the tariffs a tax on U.S. consumers and businesses. “The tariffs have been amazing,” he said. “We’re taking in billions and billions of dollars” from the Chinese, he said falsely. Expect the Office of the U.S. Trade Representative to remove few items from 10 percent List 4 Section 301 tariff exposure when the final list comes out any day, blogged trade consultant David Trumbull of Agathon Associates Thursday. “Given the current state of U.S.-China trade talks, which are at the coldest ever, there is little likelihood of averting tariffs” when they’re due to take effect Sept. 1, he said. “In view of the way” the List 3 tariffs were hiked to 25 percent from 10 percent when talks turned sour with the Chinese, “we believe that if this trade dispute continues into 2020, there is substantial risk” of List 4 being hiked to 25 percent, he said.