It’s official. The U.S. has reneged on its hard deadline for trade talks with China, giving handbag retailers more time to prepare for potentially higher tariffs.
Taking to his beloved Twitter Sunday evening, President Donald Trump told his followers that talks would be extended beyond the original March 1 deadline and a final decision is likely to be made once he meets with China’s President Xi Jinping — although a date is yet to be made public.
“I am pleased to report that the U.S. has made substantial progress in our trade talks with China on important structural issues including intellectual property protection, technology transfer, agriculture, services, currency, and many other issues,” he tweeted.
“As a result of these very productive talks, I will be delaying the U.S. increase in tariffs now scheduled for March 1. Assuming both sides make additional progress, we will be planning a Summit for President Xi and myself, at Mar-a-Lago, to conclude an agreement. A very good weekend for U.S. & China!”
This is an about-turn from before the holidays, when the Trump administration took a tough stance and said it would push up tariffs on a barrage of Chinese-made consumer-facing goods, including handbags, if trade talks failed at the end of an agreed 90-day negotiation period.
Retailers selling handbags are certainly hoping for a positive resolution. While the rest of the fashion sector escaped relatively unscathed in the tit-for-tat trade war that dominated 2018, handbags were not so lucky.
Alongside a raft of other consumer-facing goods, totaling $200 billion in imports, handbags were hit with 10 percent levies last year. That was set to rise to 25 percent on Jan. 1, but the U.S. halted those plans as part of the negotiations.
But if the talks fail, the Trump administration has said that tariffs would rise after all. That would also mean that additional levies on a further $267 billion of goods — something Trump has threatened — would become much more likely. If that happens, the total amount of tariffs would surpass the value of all Chinese imports the U.S. accepted in 2017.
Matthew Shay, president and chief executive officer of the National Retail Federation, said: “The decision to avoid a tariff hike is a positive development, and we encourage the administration to build on this momentum and reach a resolution that will eliminate uncertainty for American businesses and consumers.”