Friday, 20 September, 2019

China announces 16 categories of products to be exempted from US tariffs

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Ginger Lawrence | 11 September, 2019, 20:10

The products include whey and fishmeal used for animal nutrition, and some lubricants, Reuters said, citing a statement from the Chinese Treasury.

Washington, Europe, Japan and other trading partners say those plans violate China's market-opening commitments and are based on stealing or pressuring companies to hand over technology.

Some analysts view the move as a friendly gesture but don't see it as a signal that both sides are readying a deal.

"The exemption could be seen as a gesture of sincerity towards the USA ahead of negotiations in October but is probably more a means of supporting the economy", ING's China economist Iris Pang wrote in a note.

It said Beijing had been sounding a more "constructive" note in recent weeks over trade relations.

Beijing's earlier tariff hikes avoided processor chips and other USA technology required by Chinese industry.

China has made a decision to release 16 types of USA goods from additional duties, authorities said. That will be applied to the products subject to additional tariffs on US$60 billion of American goods. The United States is by far China's largest supplier of whey, which is an important ingredient in piglet feed and hard to source in large volumes from elsewhere.

China has imposed several rounds of tariffs on United States imports in the ongoing tit-for-tat dispute between the two countries.

Both sides imposed fresh tit-for-tat tariffs on September 1 in the latest round of levies, which now cover goods worth hundreds of billions of dollars.

China's exports fall as shipments to USA slump amid tariff war
The growth slowed from a rise of 6.7 percent for exports in the first seven months and an increase of 1.3 percent for imports. In recent months, China's exports to the United States, Europe, South Korea, Australia and Southeast Asia have declined.

China's tariff retaliation strategy to date has focused heavily on curbing trade of agricultural and manufactured goods produced in USA states key for President Donald Trump's re-election chances.

The exemption will take effect on September 17 and will be valid for a year through to September 16, 2020.

Only 16 items are exempt from extra tariffs of 25%.

Wednesday's announcement comes before Chinese trade deputies are expected to meet with their US counterparts in mid-September in Washington. With more US tariff increases on the way, China is unlikely to pare back its response by exempting soybeans and autos.

Although Abe told Xi that Trump trusts the Chinese president, Xi continued to air his grievances about his US counterpart, the diplomatic source told Kyodo News.

Last week, the United States slapped China with the first stage of a new round of tariffs that will see almost all Chinese imports taxed.

But senior White House adviser Peter Navarro tamped down expectations for the next rounds of trade talks, urging investors, businesses and the public to be patient about resolving trade dispute.

But in the statement, the commission said it was also considering further exemptions.