Since the Trump administration announced a tariff increase on many Chinese manufactured goods in July 2018, many details about the trade wars have changed while other aspects were left unclear altogether. Last September, the proposed 10 percent tax went into effect for specific import goods.
Escalating Tariffs & Responses
In early 2019, the FF&E import tariffs on $250 billion in Chinese goods were set to increase from 10 to 25 percent, but encouraging talks late last year between the U.S. and China resulted in a delay. With the lack of progress that followed, the hike went into effect in May.
The U.S. Trade Representative also announced a 25 percent tariff on an additional $300 billion worth of goods. In retaliation, China has increased tariffs on $60 billion worth of U.S. products while simultaneously decreasing taxes on goods imported from other countries.
In the past few months, we’ve heard plenty of chatter about potentially adding a five percent tariff on goods imported from Mexico, but the U.S. and Mexican governments recently reached an agreement, voiding the motion.
Note: As with many of the updates on the trade war, at this time it is uncertain whether future tariffs will take place with Mexican goods or items imported from other countries.
Where We Are Now
At the late June G20 Summit in Japan, Trump agreed to hold off on further tariffs with China for now. Each side made concessions so the two countries will do more business with each other. However, it is safe to say the status of tariffs with China and other countries is still very much up in the air.
What the Tariffs Mean for Hospitality
The U.S.-China trade war doesn’t show signs of reaching full resolution any time soon, so higher costs for FF&E items sourced from China will be with us at least for a little while. This puts pressure on supply chains, but many manufacturers are doing their best to absorb the cost and only pass a fraction of the fines along to their clients.
Now more than ever, it’s essential to be fully aware of where your FF&E charges are coming from to stick with your budget and avoid unnecessary costs. For example, Innvision Hospitality shows a separate line item in all of our quotes and invoices so clients are aware of the tariffs in play. Contact Innvision today to discover the benefits of partnering with a procurement provider you can trust.