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TGIF. Let’s celebrate the end of the week by diving into the reactions to the first phase of the new U.S.-China trade agreement and taking a look at the manufacturing sector’s expected gains in 2020, plus New Jersey’s workaround for small businesses looking to bypass the SALT cap.
President signs Phase 1 of U.S.-China trade deal, questions remain
President Trump signed “Phase 1” of a new trade agreement with China on Wednesday. While some laud the deal as a victory, claiming that the tariffs worked, many unanswered questions remain and critics of the deal claim that the provisions barely restore Chinese purchases of American goods to what they were in 2017. China, meanwhile, released numbers indicating that its economy has hit a 30-year low. At this time, there is no (announced) date on the calendar for the next round of negotiations.
The Number: $200 billion. In order to rectify the trade deficit, China agreed to spend $200 billion on U.S. imports over the next 2 years.
Manufacturing expected to rebound in 2020
The apparent end of the U.S,-China Trade war has experts feeling bullish about the manufacturing sector in 2020. A key indicator of economic health, the industry was notably hobble in 2019. Experts expect comeback this year however, as global demand increases and “companies begin to reroute their supply chains.”
The Number: 2009. The manufacturing sector slowed down to nearly a halt in 2019, reaching its lowest point last since 2009 last year.
The Quote: “If you haven’t been buying trucks and you have a fleet … eventually, you’re going to go out of business or you’re going to have to replace them.”
New Jersey enacts law helping small businesses bypass tax deductions cap
The New Jersey legislature passed a new law creating a workaround for small businesses looking to exceed the $10,000 cap for state and federal tax deductions created by the 2017 federal tax overhaul. The law allows some types of businesses, such as sub-S corporations, partnerships, sole proprietorships and LLCs, to pay taxes at the entity level instead of the personal level. New Jersey’s governor signed the bill into law on Monday.
The Number: $10,000. The 2017 federal tax overhaul set the cap for state and federal tax deductions for small businesses at $10,000. New Jersey’s workaround law is expected to save these SBOs between $200 and $400 million annually.
The Quote: “Their dedication to assisting small businesses in New Jersey does not go unrecognized.”