Glass Industry Hopeful of What Phase One Trade Deal with China Means

Organizations in the glass industry are hopeful after the announcement of an agreement between the U.S. and China on what the government is calling the Phase One trade deal that may reduce current tariffs and cancelled tariffs that were set to go into effect December 15.

The office of the U.S. Trade Representative (USTR) released a statement on Friday saying that they had reached an “enforceable agreement” that “requires structural reforms and other changes to China’s economic and trade regime in the areas of intellectual property, technology transfer, agriculture, financial services, and currency and foreign exchange.”

The agreement cancels a 15% tariff on additional goods imported from China that was to take effect Sunday (Tranche 4B) and reduces current tariffs from 15% to 7.5% on about $150 billion in goods (Tranche 4A).

In exchange, Chinese officials have agreed to accept several terms, including expanding U.S. imports by $200 billion on several goods such as manufactured and energy goods over a two-year period.

“We have agreed to a very large Phase One Deal with China. They have agreed to many structural changes and massive purchases of agricultural product, energy, and manufactured goods, plus much more,” says President Donald Trump.

The Trump Administration’s tariff increases have been rolling out in phases for the past two years with Tranche 4B as the latest anticipated increase, which has now been removed due to negotiations.

However, the agreement does not remove the 25% tariff enacted on over $250 billion of goods that include the majority of products significant to the fenestration industry which are a part of Tranches 1-3. Even though the goods included in the rollbacks do not significantly impact them, industry organizations such as the Window and Door Manufacturers Association (WDMA) say they’re hopeful of the momentum this agreement has started.

“The way [this deal] is going to help us is really just to provide additional certainty for manufacturers,” says WDMA director of government affairs Kevin McKenney. “It gives some optimism about whether or not these additional rounds of tariffs are going to continue, and that’s really a positive thing.”

The American Architectural Manufacturers Association (AAMA) also remains optimistic about the direction the deal is taking the ongoing trade war. Kathy Krafka Harkema, AAMA codes and regulatory affairs manager, says AAMA is encouraged about the future.

“As trade negotiations continue, we look forward to learning more about what specific manufactured materials China plans to import from the U.S. in the future, to better estimate how this may impact the fenestration and glazing industries in the long term,” Harkema says.

While the White House and USTR have provided no official information about the timeline of future negotiations, President Trump said in a tweet Friday that they would begin negations on a Phase Two deal immediately.

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