The United States and China will relaunch trade talks, and President Trump agreed to delay adding new tariffs on $300 billion in Chinese imports. In exchange, Trump said China agreed to increase its purchases of U.S. agricultural products, according to National Public Radio.
Trump made the announcement after meeting with Chinese President Xi Jinping during the G-20 meeting in Japan.
Trump said he will not reduce the 25 percent tariffs currently imposed on $250 billion worth of goods imported from China, according to CNBC. Xi's government retaliated by taxing U.S. exports, while also reducing tariffs on competing products from other countries.
The United States could keep in place broad tariffs on Chinese goods for months or perhaps years, prompting global companies to continue shifting the final stages of their supply chains out of China, according to The New York Times.
“As long as the threat is out there, there are risks in depending on these long supply chains,” Jacques deLisle, director of the Center for the Study of Contemporary China at the University of Pennsylvania, told The Times. “Businesses don’t like uncertainty, and this prolongs the uncertainty.”
The tariffs have prompted companies to shift supply chains out of China.
“What this has shown is there is massive uncertainty, and we’re not going to go back to the way things were,” Wendy Cutler, a former American trade official who is now a vice president of the Asia Society Policy Institute, told The New York Times.
Still, some companies either don’t have the option of shifting supply chains or said it would take too long to cultivate sources elsewhere.
“Uprooting an entire supply chain is a nightmare task,” said Jon Cowley, an attorney in the Hong Kong office of Baker McKenzie, who advises corporate clients on tariffs and supply chains. “It takes years, if not decades.”