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With only one month to go before January 1, 2019, when all parties are worried that the tariff rate imposed by the United States on US $200 billion goods from China will be adjusted from 10% to 25%, an important news suddenly comes today:


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 stated that the two heads of state discussed Sino-US economic and trade issues and reached consensus.


Trade frictions stop escalating


The two sides believe that healthy and stable Sino-US economic and trade relations are in the common interests of the two countries and the whole world.


The two sides decided to stop escalating tariffs and other trade restrictive measures, including no longer raising the existing tariff rates against each other, and not introducing new tariff measures for other commodities.


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


The two heads of state instructed the economic and trade teams of the two sides to step up consultations and reach an agreement to cancel the tariffs imposed this year, so as to promote bilateral economic and trade relations to return to the normal track as soon as possible and achieve a win-win situation.


At the same time, the United States issued a statement, the meaning is also very clear:


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


2. The tariffs originally imposed by the United States on US $200 billion of Chinese goods will remain at 10% after January 1, instead of the previously announced 25%;


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


Since September 24, the United States has imposed a 10% tariff on $200 billion of goods from China. There are 5745 taxable products in this list, of which 917 are related to the textile industry, involving all types of textile yarns, fabrics, industrial finished products and some home textiles, etc., involving an annual export value of more than 4 billion US dollars.


Impact under 200 billion


Since the 200 billion tax increase list came into effect, many export enterprises are not optimistic about the development of next year.


Main swimsuit processing and sales of the beginning of the season is one of the Zhejiang Yiwu International Trade City settled businesses. "Orders from the US are down 30 to 40 per cent from last year," he said ". U.S. merchants are the main purchasing targets of Zhiheng Clothing Co., Ltd., where Ji Dongchu is located. The company relies on exports for 60% of its annual sales of 20 million yuan, and the huge U.S. market accounts for more than 60% of the company's total exports.


Jiang Jiangping, who trades Christmas hats, pointed to a hat and said, "in July, the tariff measures imposed by China, the United States and Canada came into effect. Prices of various raw materials began to rise almost from August 1, and another round in September. For example, the cloth of this hat used to be 9000 yuan/ton, but now it has risen to 10200 yuan/ton. There is also this kind of plush, which has risen from 7.5 yuan/meter to 9.8 yuan/meter. This has led to many orders delivered after August this year, accounting for about 40% of the annual order volume. We have not made much money."


More than 120 enterprises in Yuhang, which is dominated by the home textile industry, have been affected, involving an amount of about 0.13 billion US dollars, accounting for about 50% of the total textile exports of Yuhang District's home textile fabrics and finished products to the United States (excluding clothing), accounting for 13.9 of the total export of home textile fabrics and finished products. Among them, Zhongwang fabric, Otans fabric, Central Asia fabric and other home textile leading enterprises affected a higher proportion.


In addition, Sino-US trade frictions have already had an impact on cotton imports. The United States is my country's most important cotton supplier. Last year, my country imported 506300 tons of cotton from the United States, accounting for 44% of my country's total cotton imports.


It is conceivable that if the tariff increase is adjusted from 10% to 25%, the impact on enterprises will be greater. Maintaining it at 10% gives many companies a little relief.


Towards the abolition of the levy


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


The teams of the two sides 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 abolishing all tariff increases and reach specific details of mutual benefit and win-win as soon as possible.