Longstanding commerce issues between China and the United States may finally be taking a step in the right direction, as President Trump signed a Phase One Trade Agreement on January 15th, 2020. The 94-page agreement defines what steps China will take in an effort to alleviate trade tensions between the two largest economies in the world.
What the Agreement Entails
Though this phase is only the beginning of a slow-moving resolution to the trade wars between the U.S. and China, the trade agreement tackles some major economic aspects that show promise:
- The deal involves a $200 billion purchase agreement of American products and services from China to take place in the following two years.
- Though exact numbers are not yet clear, this agreement promises a reduction of import tariffs for both parties.
- Previously enforced agricultural import bans on American products will cease.
- China agreed to enforce legal repercussions for the intentional theft of trade secrets.
- Restrictive codes on American financial agencies will release, permitting better U.S. access to financial markets in China.
The Trade War’s Impact on Hospitality
While the trade agreement is good news for the United States’ relations with China, it won’t make a sudden significant difference in prices on imported goods. Tariff reductions will occur slowly over the next two years, so utilizing other sources for FF&E may still be wise for a hotelier’s bottom line.
The past 18 months have resulted in somewhat of a shift in the hotel industry’s demand for Chinese manufacturers. Many companies moved their factories out of China during this time, lessening China’s overall power and presence in the hotel FF&E industry. Domestic vendors also took advantage of this period to perfect and improve their efficiency and operations, making U.S. manufacturers an even more viable option for purchasing FF&E.
Innvision Hospitality is committed to finding cost-effective solutions for hoteliers regardless of the political and economic climate. Reach out to our FF&E design and procurement experts today for end-to-end services and applicable guidance on your next hotel project!