US-China tariffs postponed

Good news for US toy companies as harsh levies expected to be imposed yesterday, 15 December, have been cancelled in preliminary agreement between the US and China

Written by Rhys Thomas

Posted 16.12.2019 | Business

US-China tariffs postponed thumbnail

A wave of strict tariffs on toys imported to the US from China, due to take effect yesterday, has been cancelled, for the time being.

Billions of dollars of tariffs, due to come into effect on 15 December, will be avoided after the two governments struck up an initial ‘phase one’ agreement to relax trade tensions.

Alongside toys, planned levies on smartphones, fashion items and more have also been postponed, in what US President Donald Trump calls “an amazing deal for all”.

Taking to twitter, Trump says further good news could be on the way: “We will begin negotiations on the phase two deal immediately, rather than waiting until after the 2020 Election.”

Steve Pasierb, president and CEO of the US Toy Association, which has tirelessly lobbied against the proposed levies, welcomed the news, saying the industry "can move forward". 

"The news that the toy industry and the families we exist to serve will not be impacted by tariffs on Sunday is a welcome relief. We applaud the administration for coming to an agreement with China that begins to roll back these regressive taxes," he wrote on LinkedIn. 

"With uncertainty removed, toy companies can move forward and focus on planning, product development, and providing joy for kids through the toys and games they make. We urge the administration to seize this opportune point in time to also eliminate tariffs that remain in effect.

The agreement will relax tariffs on millions of goods, including toys, in exchange for an increase in Chinese spend on US industrial equipment, primarily agricultural and energy products. China will also be forced to crack down on its counterfeit culture, heightening vigilance on protecting US IP and doing more to track down illegal copycat manufacturers – a practice that has plagued toys and licensees for decades.

Other terms include opening the doors to China’s financial services for US firms and greater transparency on the grey market for US technology innovation.

But the terms could be reversed if China breaks its pledges, plunging US toy companies into a situation some say could spark a mass collapse of suppliers and retailers who are unprepared or unable to shoulder the extra costs.

US trade representative Robert Lighthizer shifted responsibility for the agreement’s long-term success on China.

“Ultimately, whether this whole agreement works is going to be determined by who’s making the decisions in China, not in the United States,” he said.

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