On Sunday, the U.S. tariffs on the remaining $156 billion in Chinese goods are set to go into effect. Officials and financial markets had been hoping that the world’s two largest economies would avert these levies, but they might happen, even as the two sides iron out phase one of a trade agreement.
The Wall Street Journal reported that U.S. and Chinese representatives are “laying the groundwork” to delay the new tariffs that were originally planned for December 15. According to unnamed American and Chinese officials involved in the negotiations, the two sides are trying to get Beijing to commit to purchasing more U.S. agriculture.
Markets somewhat positively reacted to the news, but then they pared those gains when White House economic advisor Larry Kudlow dismissed the report. He told attendees at a WSJ conference:
The reality is those tariffs are still on the table, the Dec. 15 tariffs, and the president has indicated if the short strokes remaining in negotiations do not pan out to his liking that those tariffs could go back into place.
So, they could not, but they also could. There is no definitive decision on that yet.
With the USMCA now ready to be ratified by Congress, the U.S. now needs to finalize the China deal and President Donald Trump will have met his campaign promises ahead of the 2020 election.
Unfortunately for libertarians, the USMCA and a potential U.S.-China trade deal will just be more of the same.
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