With only one month left on January 1, 2019, when the parties raised the tariff rate on the US$200 billion from China, the tariff rate will be adjusted from 10% to 25%. Suddenly, an important news is obtained:

On the evening of December 1, US local time, President Xi Jinping and US President Trump met in Buenos Aires, Argentina. After the meeting, the relevant person in charge of the Chinese economic and trade team said that the two heads of state discussed the Sino-US economic and trade issues and reached a consensus.

Trade friction stops upgrading

The two sides believe that a healthy and stable Sino-US economic and trade relationship is in the common interest of the two countries and the world.

The two sides decided to stop the trade restrictions such as upgrading tariffs, including not raising the existing tariff rate for each other, and not introducing new tariff-adding measures for other commodities.

The two sides agreed to immediately address each other's concerns in a spirit of mutual respect, equality and mutual benefit. In accordance with the requirements of the 19th National Congress of the Communist Party of China, China will further take measures to deepen reform and expand opening up. In the process, some economic and trade issues that the US is concerned about will be resolved. At the same time, the US will also actively resolve the economic and trade issues of concern to China.

The two heads of state instructed the economic and trade teams of the two sides to intensify consultations and reach an agreement to cancel the tariffs imposed this year and push bilateral economic and trade relations back to normal track as soon as possible to achieve a win-win situation.

At the same time, the US issued a statement with clear meaning:

1. The Sino-US trade war will no longer be upgraded, and the two sides will no longer impose new tariffs;

2. The tariffs imposed by the US on the 200 billion US dollars of Chinese goods were still maintained at 10% after January 1, instead of the 25% previously announced;

3. The two sides will step up consultations. Once the negotiations reach an agreement, all tariffs imposed this year may be cancelled.

Since September 24, the United States has imposed a 10% tariff on 200 billion US dollars of goods from China. There are 5,745 taxation products in this list, including a total of 917 textiles, covering all types of textile yarns, fabrics, industrial finished products and some home textiles. The annual export value of the products exceeds 4 billion US dollars. .

200 million impact

Since the entry of the 200 billion tax increase list, many export companies have expressed optimism about the development of next year.

At the beginning of the season, which is mainly engaged in the processing and sales of swimwear, it is one of the merchants in Zhejiang Yiwu International Trade City. He said, "Orders from the US have fallen by 30% to 40% compared to last year." The American merchants are the main purchase targets of Zhiheng Garments Co., Ltd., where the early winter season is located. 60% of the company's annual sales of 20 million yuan depends on exports, and the huge US market accounts for more than 60% of the company's total exports.

Jiang Jiangping, who is doing the Christmas hat trade, pointed to a hat and said, "In July, the measures to increase tariffs between China and the United States came into effect. Various raw materials began to increase prices almost from August 1, and another round rose in September. For example, the fabric of this hat was 9000 yuan/ton before, and now it has risen to 10,200 yuan/ton; and this kind of plush has risen from 7.5 yuan/meter to 9.8 yuan/meter. This leads to delivery after August this year. Many of the orders, about 40% of the annual order volume, we have not made any money."

About 120 enterprises in the Yuhang area, which is mainly based on the home textile industry, are affected, involving an amount of about 130 million US dollars, accounting for 50% of the total textiles and finished products exported from Yuhang District (excluding clothing), accounting for home textile fabrics and finished products. 13.9% of total exports. Among them, the leading textile companies such as Zhongwang Fabric, Otans Fabric, and Central Asian Fabrics are affected more.

In addition, Sino-US trade friction has already had an impact on cotton imports. The United States is China's most important cotton supplier. Last year, China imported 506,300 tons of cotton from the United States, accounting for 44% of China's total cotton imports.

It is conceivable that if the tariff increase is adjusted from 10% to 25%, it will have a greater impact on the company. Maintaining at 10% has left many companies a little relieved.

Efforts towards cancellation

State Councilor and Minister of Foreign Affairs Wang Yi said that China and the United States have proposed a series of constructive plans on how to properly resolve existing differences and problems. China is willing to expand imports according to the needs of the domestic market and the people, including the purchase of marketable goods from the United States, and gradually ease the problem of trade imbalance. The two sides agreed to open the market to each other.

The two teams will, in accordance with the principled consensus reached by the heads of state of China and the United States, step up consultations in the direction of canceling all tariff increases and reach specific rules for mutual benefit and win-win as soon as possible.

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