Uncertainties abound about the phase one trade agreement the U.S. and China announced Friday (see 1912130042), including when the rollback in the List 4A Section 301 tariffs to 7.5 percent will take effect. The Office of the U.S. Trade Representative didn't comment Monday. Tech was euphoric the List 4B duties were averted Sunday. But the 25 percent tariffs on the first three rounds of Chinese imports now appear destined to remain in force for as long as it takes the U.S. and China to negotiate a more comprehensive phase two trade agreement, leading many tech interests to express frustration.

There continues to be “a lot of moving parts” to the Section 301 tariffs on Chinese imports, Costco Chief Financial Officer Richard Galanti said on a fiscal Q1 call on Dec. 12. With the “current news” that the U.S. and China are close to a “Phase One” trade deal, “we will have to wait and see,” he said. U.S. and Chinese negotiators confirmed agreement Dec. 13 on the Phase One deal (see 1912130035) that includes rolling back the List 4A tariffs by half to 7.5 percent and suspending the List 4B duties that were to take effect Dec. 15. The Trump administration said it’s keeping the 25 percent tariffs in place on the first three tranches of goods.

CBP issued the following releases on commercial trade and related matters:​

With the announcement of a phase one deal, Flexport chief economist Phil Levy said the promise is for stability in tariff levels -- even if the large majority of goods facing Section 301 tariffs will retain the 25 percent hike. But, he noted in a Dec. 16 webinar, many times over the last eight months, “a deal was announced, and it didn't last. That should sort of serve as a precautionary tale.” Levy, like many observers, doesn't believe that a phase two deal, that could lead to rolling back more tariffs, is likely in the next year.

With the last round of consumer goods imported from China spared, and a reduction in Section 301 tariffs on about $120 billion in goods that were first subject to additional tariffs Sept. 1, some business interests welcomed the de-escalation, but warned that the U.S. should stay focused on more significant economic reforms in China. The tariffs on List 4a, which are at 15 percent and apply to about 3,800 8-digit tariff lines, will go to 7.5 percent.

There continues to be “a lot of moving parts" to the Section 301 tariffs on Chinese imports, said Costco Chief Financial Officer Richard Galanti on a fiscal Q1 call Thursday evening. With the “current news” that the U.S. and China are close to a “Phase One” trade deal, “we will have to wait and see,” he said.

Tech and business groups hailed Friday’s announcement of a “Phase One” U.S.-China trade deal for averting the 15 percent Section 301 List 4B tariffs from taking effect Sunday and cutting in half the 15 percent List 4A duties in place since Sept. 1. It's unclear when the reduction to 7.5 percent will take hold.

President Donald Trump tweeted Dec. 12 that U.S. and China negotiators are “Getting VERY close to a BIG DEAL with China. They want it, and so do we!” However, Trump has said before that the two sides were very close -- including two months ago -- and nothing came of it. Numerous media outlets reported Dec. 12 that administration officials said an agreement in principle has been reached between China and the U.S., but no announcement had been made by press time. Several media outlets reported that the U.S. was willing to cancel tariffs set to take effect Dec. 15 and cut existing Section 301 tariffs by half, and an adviser to the president said Trump would cut tariffs, but did not say by how much. An announcement is expected on Dec. 13.

The U.S. is “getting VERY close to a BIG DEAL with China” on trade, tweeted President Donald Trump at 9:35 a.m. EST Thursday. “They want it, and so do we!” Trump eight days earlier in London said he liked “the idea of waiting until after the election for the China deal” (see 1912030006). The 15 percent List 4B Section 301 tariffs are scheduled to take effect at 12:01 a.m. Sunday. The Office of the U.S. Trade Representative didn’t comment.

The Office of the U.S. Trade Representative is making some changes to “certain notes in the Harmonized Tariff Schedule of the United States” related to the second tranche of Section 301 tariffs, it said in a notice. “To correct technical and ministerial errors and in order to conform to the U.S. Trade Representative’s intent to grant certain exclusions, the Annex to this notice includes amendments to certain notes in the HTSUS,” it said.