Hopes rise that lifting tariffs could allow U.S.China accord
The prospects for a preliminary breakthrough in the U.S.China trade war improved Thursday after the two sides agreed to reduce some punitive tariffs on each other’s goods, though the full extent of the rollback wasn’t clear.
A Chinese spokesman announced the development Thursday as talks on ending the trade war progressed, and it triggered a rally in U.S. stock markets.
A U.S. private sector analyst with knowledge of the talks said there are still deliberations in the White House about how far to roll back the duties and what steps China must take before the reductions would occur. The analyst spoke on condition of anonymity because he wasn’t authorized to discuss the talks publicly.
The ongoing talks are aimed at working out details of a “Phase 1” deal that was announced Oct. 12. Financial markets had been rattled by reports that China was pushing for tariffs to be lifted, which posed the prospect of a breakdown in talks.
Negotiators agreed to a “phased cancellation” of tariff hikes if talks progress, said a Chinese Commerce Ministry spokesman, Gao Feng, early Thursday.
“If the two sides achieve a ‘Phase 1’ agreement, then based on the content of that agreement, tariffs already increased should be canceled at the same time and by the same rate,” Gao said at a news briefing.
As for the size of reductions, Gao said that would depend on the agreement.
“We can be cautiously optimistic here,” said Mary Lovely, a trade economist at the Peterson Institute for International Economics in Washington. “The signals that are coming out are moving in the right direction for a deal.”
The two sides are aiming to finalize the agreement by the end of next week, the private sector official said. President Donald Trump and China’s President Xi Jinping would still need to agree on where and when they would formally sign the pact.
As part of the agreement, the Trump administration would withdraw threatened tariffs that it planned to impose Dec. 15 on about $160 billion in Chinese imports, the source said. Those duties would cover smartphones, laptops and other consumer goods.
Still unresolved is whether and how much to reverse the tariffs that were imposed Sept. 1 on $112 billion of Chinese imports, the private sector analyst said.
“The White House never speaks with one voice,” Lovely said.
On Wall Street, stocks
sounding TP Engineering, which builds custom, vtwin engines for installation on HarleyDavidson motorcycles.
Rothstein happened to be riding a HarleyDavidson himself alongside biker friends in the Lordship section of Stratford where he lives on the Sunday morning in May when he received the call that ATP’s plant was on fire in Bethel’s sprawling Francis J. Clark Industrial Park.
The cause was later determined to be a machine’s electrical wiring.
“There were already probably 40 firetrucks by the time we got there,” Rothstein recollected during a Thursday tour of the new Danbury facility. “They brought in tanker trucks because they ran out of water in Bethel — they put them all around in a makeshift holding tank on the street, and they pumped water for 10 hours. They sent up a drone that measures temperature, and one of the firefighters said that was the hottest fire he’d ever seen.”
ATP office manager Chrissey Arditi was watching her daughter march in a Memorial Day parade that morning in Bethel when she got word of the fire a mile north.
“I thought it was a little bit odd that there were no firetrucks in the parade,” Arditi said.
With no other available Bethel building fitting the specifications ATP required and wanting to keep his workforce intact — he maintained payroll during the downtime, with the assistance of an insurance policy reimbursing for business interruptions — Rothstein found the best alternative on Finance Drive in Danbury, just off the Newtown Road retail drag centered by the Berkshire Shopping Center.
That was only one complicating factor — Rothstein had to let his distribution customers know of the disruption they could expect in ordering ATP’s monogrammed tape they sell to their own commercial clients, and scout alternative manufacturing arrangements with other companies capable of printing the company’s tape.
And a trip to Italy was on the
July itinerary as well to order the big printing presses ATP uses to print tape. Rothstein said he visited the printing press manufacturer with the intent of purchasing two machines that cost more than $200,000 each — instead, he bought eight, with three now operational and the rest coming in over the coming weeks.
“I ended up taking all of them,” Rothstein recounted. “The guy said, ‘Today, I am my father’s favorite son.’”
Danbury chamber members will see a shell of an office and plant floor on Friday — but one humming with early activity, with the memories receding of the smoking shell of ATP’s former Bethel home. Rothstein expects the company to be at full production by the end of this year.
Like any rebuild, there was a silver lining — Rothstein invested in the latest digital scanning and printing technologies that produce images on tape at four times better resolution than ATP’s old systems. And the company will be able to offer its customers tape that biodegrades over time, an important consideration for the thousands of businesses that use ATP tape each day.
Among ATP’s early customers was a West Coast startup called Amazon, with the online giant quickly outstripping ATP’s capacity to supply it with tape for the packages Amazon ships.
But Rothstein acknowledges the indirect role Amazon has played in increasing demand for packaging tape as online shopping grows ever more dominant — and smiles at the thought of the company establishing its first Fairfield County distribution center not a mile from where he lives in Stratford.
“Probably the single biggest influence on what we do was Amazon and the Internet,” Rothstein said. “Now everyone is shipping, and instead of you picking up a box on your shelf, it’s now a box that comes to your door . ... We’re going to be busy for the next 15 years, just based on the growth trends.”