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More US goods to be exempted from tariffs

2019-12-23

Source: Global Times    Published: 2019-12-19



Gao Feng, spokesperson for the Chinese Ministry of Commerce, leaves after a press briefing on Thursday in Beijing. Photo: Wang Cong/GT


China on Thursday extended another goodwill gesture to the US by exempting more US products from its tariffs, as officials on both sides continued to put the final touches on the phase one trade agreement, whose text was agreed on by both last week.


The decision to release a second list of US products to be excluded from China's tariffs imposed in retaliation to the US' tariffs followed recent purchases of US soybeans, highlighting China's swiftness in keeping its commitments, experts noted. Washington should also follow suit to honor their commitments.


The Customs Tariff Commission of the State Council, China's cabinet, released the list of six chemical products, including white mineral oil and food grade paraffin wax, which will be exempted from a tariff of 25 percent for one year starting on December 26.


The tariff was initially imposed in countering US Section 301 measures, the commission said in a statement.


The exemption will benefit US companies such as Exxon Mobil and Dow Chemical, as lifting of tariffs could see more Chinese imports of those chemicals, according to media reports. The total value of these imports reached $14 billion in 2018, Reuters reported on Thursday.


The move on Thursday followed announcements earlier this month that China will offer tariff waivers for some US imports, including soybeans and pork.


Following the decision, Chinese companies have moved to purchase US soybeans, Zhang Xiaoping, country director for China at the US Soybean Export Council, confirmed to the Global Times. Zhang said that each Chinese company received a quota for purchasing US soybeans and pork but it is unclear who the specific buyers were and what amounts they bought.


While US officials have reportedly been floating different numbers for China's purchase of US goods as part of the phase one trade agreement, Chinese officials have not released one. On Thursday, the Chinese Ministry of Commerce declined to confirm rumored amounts of China's purchase of US goods.


"Regarding the specific content of the phase one agreement, I don't have more information to disclose. After the agreement is officially signed, the contents will be released," Gao Feng, a spokesperson for the ministry, told a press briefing in Beijing. Gao also did not confirm some US officials' suggestion that the deal could be signed in January, only repeating that the two sides have been keeping in close contact.


"Since the trade war began, China's attitude to addressing the issue positively has been consistent. The exemption list also showed that China honors its words," Diao Daming, an associate professor at Renmin University of China, told the Global Times on Thursday, adding that he hopes the US will respond with "positive actions."


As part of the phase one deal, the US called off tariffs that had been scheduled to take effect on Sunday and agreed to roll back existing tariffs in phases.


Bai Ming, a research fellow at the Chinese Academy of International Trade and Economic Cooperation in Beijing, said that so far the US has also been "implementing the agreement" in line with China's "positive attitude."


It was unclear how China decided to exempt the six chemical products from tariffs and the value of those imports. But Gao Lingyun, an expert at the Chinese Academy of Social Science, said that China would consider the environment costs of producing those products and the demand in the domestic market.


"Products that could cause pollution or that China cannot produce and for which there is demand, would be considered for exemptions first," Gao Lingyun told the Global Times on Thursday.


Asked about the value of the new exemption list, Gao Feng, the spokesperson for the Ministry of Commerce, referred questions to the Customs Tariff Commission.


Diao Daming is a research fellow of Chongyang Institute for Financial Studies at Renmin University of China.

Key Words: Trade war   Trade agreement   RDCY   Diao Daming  

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