Tariff Update: U.S. And China Sign Phase One Trade Deal
On Jan. 15, 2020, the U.S. and China signed a phase one trade deal that requires structural reforms to China's economic and trade regimes. These reforms will be seen in the areas of intellectual property, forced technology transfers, financial services, agriculture, and currency and financial exchanges. In addition, China has agreed to purchase substantial quantities of U.S. origin goods and services in the coming years.
As a result, the U.S. agreed to modify a portion of its existing Section 301 China tariffs, a point of interest to members of The Vision Council who import Chinese-origin product. The Office of the United States Trade Representative (USTR) has issued a Federal Register Notice stating that the present 15 percent tariff applicable to Chinese-origin goods on List 4A will be reduced to 7.5 percent for goods entered or withdrawn from consumption on or after Feb. 14, 2020. List 4A included lenses, frames, sunglasses, readers, eyeglasses and some low vision devices. The existing 25 percent tariff assessed on products contained on Lists 1, 2, and 3, however, will remain in place, subject to future negotiations between the U.S. and China.
The agreement contains another point of interest for The Vision Council's members. China has agreed to expand trade with the U.S. by purchasing approximately $200 billion more in U.S. goods over the next two years, drawn from the following general categories: manufactured goods ($77.7 billion), agriculture goods ($32.0 billion), energy products ($52.40 billion) and services ($37.9 billion). The manufactured goods category is further subdivided into eight subgroups, one of which is "optical and medical instruments," covering items classifiable under the following Harmonized Code tariff headings: 9002, 9003, 9011, 9012, 9018, 9019, 9020, 9021 and 9022. Thus, The Vision Council's members may have new opportunities to sell these U.S.-made products into China.
Any questions about this issue can be directed to Rick Van Arnam, The Vision Council's regulatory affairs counsel, at email@example.com.