Just in the nick of time before a new round of tariffs was supposed to go into effect, the U.S. and China have announced a limited deal to end the trade war. Eventually.
Note: This is a Lifehacker US story. Head to Lifehacker Australia for AU-relevant stories.
It’s a “phase one” deal, which cancels the tariffs on imports of items manufactured in China. Those tariffs would have started on Dec. 15 and were considered penalty tariffs. They would have included smartphones and consumer electronics.
As part of the deal, items already subject to a 15% tariff will have that reduced to 7.5%. Items subject to the 25% rate, including machinery and furniture, will maintain that rate.
In exchange, China has agreed to make “substantial additional purchases of U.S. goods and services,” the Office of the U.S. Trade Representative said in a press release. Trump said after the deal was announced that he expects China will buy $US50 ($73) billion worth of farm goods as part of that promise.
This first phase was announced in October, and although it didn’t have many details at the time, Trump suspended that month’s plans to increase tariffs further.
Now, the two nations enter a second phase of negotiation. As long as China continues to negotiate, the U.S. won’t install any new tariffs, said U.S. Trade Representative, Robert Lighthizer.
It’s good news for consumers, but you may not notice an immediate difference.
As new tranches, or sections, of tariffs were implemented, many big-box stores told their suppliers they simply would not tolerate price increases. The reason? They didn’t want to raise prices to account for additional costs because customers have become so conditioned to rock-bottom prices—especially during the lucrative holiday shopping season. Target was one major company who made this demand, per a leaked letter from September.
If you regularly shop at small businesses, you’re more likely to see a slight price dip as the cost of their supplies starts to drop; small businesses were anticipated to feel the tariff hit harder because they couldn’t absorb the costs like big corporations could.
And if you already did your holiday shopping, don’t worry—you’re not going to miss out on any wild markdowns. Everything that you’re seeing in stores that’s subject to tariffs has already been accounted for.