Just a brief update on the below — since President Trump announced on June 29th that the U.S. and China had agreed to restart negotiations to resolve their trade dispute, it appears that remarkably little progress has been made. Instead, it appears that both sides may be digging in for a protracted trade war.
As part of his announcement two weeks ago, President Trump said that China would start buying a “tremendous amount of food and agricultural product” from the United States. So far, however, those purchases have not materialized. President Trump tweeted this past Thursday that “China is letting us down in that they have not been buying the agricultural products from our great Farmers that they said they would. Hopefully they will start soon!”
Also, while the two sides did have a high level phone call this past week, no plans were announced following that call for the resumption of face-to-face negotiations. It was also announced by the White House that further negotiations would be led on the U.S. side by the U.S. Trade Representative, rather than by the USTR and the Treasury Secretary, as has been done in the past. Given that the USTR is generally viewed as more hawkish than the Secretary of the Treasury on the trade war with China, this may be a sign that the U.S. position is hardening. It is also worth noting that, despite the president’s announcement two weeks ago, neither the White House, nor the USTR, has issued an official statement suspending List 4 (which means it could come back at any time).
While it is possible that the two sides will start to ramp up negotiations in the coming weeks, that does not seem likely. Instead, it increasingly seems like both sides are content to live with the status quo. As a result, companies should continue to pursue their Section 301 mitigation strategies (e.g., revamping their supply chains, accelerating imports of List 4 articles, pursuing List 3 product exclusion requests, etc.), as the additional duties may be around for a while longer.
We hope that this update is helpful. If you have any questions, or if you would like to discuss any of these issues further, please let us know.