Tech Companies Find Respite As US Cancels Penalty Tariffs On China-Made Products

Here's a new turn of events amidst the ongoing US-China trade standoff. The US President has shared a new update on Twitter that the penalty tariffs will not be charged for China-made products. The increased 15 percent tariffs were supposed to begin from December 15, but the government has made 'a very large Phase One Deal with China' now.

US Cancels Penalty Tariffs

The US government had previously set a 15 percent tariff hike on products and gadgets made in China. This would have shot up the prices of consumer electronics, including the iPhone and various laptops. As negotiations were going on, there was a delay in rolling out the hiked tariff. Now it looks like it won't go into effect at all.

"We have agreed to a very large Phase One Deal with China. They have agreed to many structural changes and massive purchases of Agricultural Product, Energy, and Manufactured Goods, plus much more. The 25% Tariffs will remain as is, with 7 1/2% put on much of the remainder...." says President Trump.

We have agreed to a very large Phase One Deal with China. They have agreed to many structural changes and massive purchases of Agricultural Product, Energy, and Manufactured Goods, plus much more. The 25% Tariffs will remain as is, with 7 1/2% put on much of the remainder....

— Donald J. Trump (@realDonaldTrump) December 13, 2019

Further continuing the change in tariff, the President said that "the Penalty Tariffs set for December 15th will not be charged because of the fact that we made the deal." According to the Wall Street Journal, the 25 percent US tariffs on certain Chinese-made products will remain in place. Now, a tariff that came into effect on September 1 will be reduced to 7.5 percent.

Additionally, the Office of the US Trade Representative released a fact sheet that said that the deal included a commitment by China to purchase more US goods in the future. It would also mean "structural reforms and other changes to China's economic and trade regime in the areas of intellectual property, technology transfer, agriculture, financial services, and currency and foreign exchange," the fact sheet noted.

The Trump administration had announced the Phase One agreement back in October. The latest tweet says that the Phase Two negotiations would begin right away without waiting for the 2020 elections to commence.