Last weekend, US and Chinese trade representatives frantically met around the clock in an effort to beat the March 1st deadline that marked the end of the 90 day truce.
Apparently both sides have made significant progress and President Trump announced that he is willing to extend the March 1st deadline in which the tariffs were to increase.
This means that if your imported products are currently hit by a 10% increase in import tariffs they will NOT rise to 25% on March 1st as originally planned.
The media has been playing up this story recently. And the US stock market rallied with the seemingly good news.
But does this mean the trade war is coming to an end?
In my opinion, not just yet.
Although there are talks of both sides close to signing a deal, nothing concrete has been reached yet. So far it’s just a lot of talk.
In my years of working with US and Chinese businesses, I have learned to never jump to conclusions.
In other words DON’T count your eggs before they hatch.
Things can change very quickly and unexpectedly.
To illustrate I’d like to share with you a story when I first moved to Shanghai and searching for apartments. After looking high and low, I finally found one that was in a great location, had good furnishings… AND the rent was even affordable! I was ecstatic to find such a gem.
After viewing the apartment and meeting the landlord, I made a good impression on her and she was willing to rent to me. She said that we could sign the deal next week and I agreed.
However, the night before we were to sign the contract, the landlord called and claimed that her daughter was returning from overseas and needed a place to live so she was no longer renting out the apartment.
Even though we had a verbal agreement, in the end things changed and I was left high and dry and back to the apartment hunt.
Similar variations of this story have happened to me countless times in China over the years.
The conclusion is either I’m a sucker OR we should NOT take someone’s words at face value.
And my lesson learned is that if someone agrees verbally, I will press them to sign a deal in WRITING ASAP before they change their mind!
Keeping this in mind, with the US-China trade deal, until both sides have an agreement in writing I’m concerned that circumstances may change and the 10% increase in tariffs may still rise to 25%.
Will there be an agreement made? It’s possible.
But the bright side is, tariffs will not increase just yet on your ecommerce products.
The story continues.
Meanwhile I’m curious what’s your take on this? If you’re importing products from China to the US, how are you playing your hand given this uncertainty in how the tariffs will turn out? Let me know.