United States President Donald Trump recently reduced tariffs on $120 billion worth of Chinese goods from 25 percent to 7.5 percent. However, the office of the U.S. Trade Representative confirmed that 25 percent of tariffs will remain on $250 billion of Chinese exports, according to CNBC.
During 2019, Chris Wilder, CEO of Sealing Equipment Products Company, Inc. (SEPCO), said the little that he does import directly from China was up in price 25 percent this past year.
“We have seen a tariff surcharge on some raw material items that we buy domestically that have some imported material as part of their content,” Wilder said. “Some other domestic items’ prices have also increased because China’s prices went up.”
Wilder said he has passed on a minimum of increases to customers, instead absorbing most of the increases. They have also stopped including China in their material sourcing program be-cause of the tariffs.
His prediction for 2020?
“We think the U.S. economy will remain relatively strong, maybe approaching 2019’s numbers, but the global economy may continue to decline somewhat,” Wilder said.
A new set of U.S. tariffs on Chinese imports was due to take effect on Dec. 15, but has been canceled for now. If those higher tariffs had gone forward, the BBC said, Chinese-made goods such as smartphones, clothing and toys would have become more expensive for the U.S. just ahead of Christmas.
The tariffs were first imposed on Chinese imports in January 2018. The sanctions were based on what the U.S. argued were illegal acts, policies and practices related to technology transfer, intellectual property and innovation, according to CNBC.
The BBC articles states that the reduced tariffs are a “deal in principle,” and China has agreed to buy large quantities of U.S. soybeans, poultry and other agricultural products. If China breaks any part of this agreement, the Trump administration can reinstate the tariffs.
A study by New York Fed Reserve Bank released Nov. 25 showed that prices Chinese firms charge have changed very little and U.S. companies and consumers are paying the tariff costs, estimated at around $40 billion annually.
Import data from June 2018 to September 2019 shows Chinese import prices fell only 2 per-cent, the study found, in line with price declines seen in many other nations as global trade slowed.
China’s share of U.S. imports of machinery and electrical equipment has fallen by around 2 percentage points since 2017, according to Reuters. Its share of U.S. electronics imports has fallen by 6 percentage points.