US President Donald Trump said trade negotiators on both sides were on the final stages of completing a Phase One trade deal on Tuesday.
“We’re in the final throes of a very important deal, I guess you could say one of the most important deals in trade ever. It’s going very well but at the same time we want to see it go well in Hong Kong,” said Trump to reporters at the White House on Tuesday.
“I think that President Xi can make that happen. I know him and I know he’d like to make it happen,” he added.
China’s negotiating leader Liu spoke to US Trade Representative Robert Lighthizer and US Treasury Secretary Steven Mnuchin completed a call Tuesday morning over the “Phase One” trade deal.
The 16-month trade war has disrupted the global trade and value chains around the world.
The Organisation for Economic Co-operation and Development (OECD) stated that the ramifications of the US-China trade war has caused global economic growth to erode to Great Financial Crisis levels ten years ago.
Additionally, The New York Federal Reserve Bank found that US firms and consumers were bearing the brunt of higher tariffs for Chinese goods.
Tariffs are a form of taxation and a way countries generate revenue. In the past, tariffs were one of the largest sources of funding for governments. Tariffs are a form of sales tax charged by a country’s customs authority. They are charged at the port of entry of the goods by a country’s custom’s authority and paid for by the domestic purchaser of the good.
“US businesses and consumers are shielded from the higher tariffs to the extent that Chinese firms lower the dollar prices they charge,” stated a research by the New York Federal Reserve.
“US import price data, however, indicate that prices on goods from China have so far not fallen,” revealed the report. “As a result, US wholesalers, retailers, manufacturers, and consumers are left paying the tax.”
US Census Bureau and Department of Agriculture data revealed the ramifications of the tariffs that went into effect on September 1 on a batch of Chinese goods worth $112 billion. On that tariff increase alone Americans paid an additional $905 million.
“In the month of September alone, Americans paid a total of $7.1 billion in tariffs, more than any other amount in US history – a 59 percent increase from the same month last year and an increase of $600 million over last month,” read a statement from the US-based organization Tariffs Hurt the Heartland (THH).
UNCTAD, the main United Nations body dealing with trade and development issues, released a report finding identical conclusions on the effects of the US-China trade war.
“US consumers are paying for the tariff in terms of higher prices,” said economist Alessandro Nicita in the UN report. “Not only final consumers like us, but importers of intermediate products – firms which import parts and components from China.”