Agriculture Secretary Says Dec. 15 Tariffs on Chinese Goods Won't Happen Then

Agriculture Secretary Sonny Perdue said he doesn't expect the Dec. 15 round of tariffs on consumer goods from China to go into effect then, according to Bloomberg News.“I do not believe those will be implemented and I think we may see some backing away,” Purdue said at a conference in Indianapolis on Dec. 9.

It would be the second time the White House has backed down from escalating the trade war with China. On Oct. 11, President Donald Trump said Chinese and American negotiators had reached agreement on intellectual property, financial services and agricultural sales. He also said good progress had been made on issues around technology transfer from American companies to Chinese partners, and so there would be no tariff hike on Oct. 15. That agreement, also called a phase one agreement, has not materialized in the two months since then.

Analysts have also said the administration was seeking to avoid escalation. Chances are very high that List 4B Section 301 tariffs won’t take effect Dec. 15 and will be postponed to a later date, said Alexander Kazan, chief strategy officer at the Eurasia Group, during a Dec. 9 webinar hosted by KPMG. Kazan, who puts the probability at 85 percent to 90 percent, said the delay would be meant to encourage the current round of negotiations between the U.S. and China. There’s about a 60 percent chance that a phase one deal gets done in the first quarter of 2020, but there will be only limited tariff relief because the U.S. wants the tariffs to stay on to encourage major commitments from China, Kazan said. Once the phase one deal is in place, a “phase two” deal becomes a tougher slog, with more contentious issues at stake and less political pressure on U.S. negotiators, he said, adding that a phase two deal likely won’t happen before the 2020 election.