BEIJING: China announced its first batch of tariff exemptions for 16 types of US products, days ahead of a planned meeting between trade negotiators from the two countries to try and de-escalate their bruising tariff row.
The exemptions will apply to US goods including some anti-cancer drugs and lubricants as well as animal feed ingredients whey and fish meal, the Ministry of Finance said in a statement on its website on Wednesday.
Beijing said in May that it would start a waiver programme amid growing worries over the cost of the protracted trade war on its already slowing economy.
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 US ahead of negotiations in October but is probably more a means of supporting the economy,” ING’s Greater China economist Iris Pang wrote in a note.
“There are still many uncertainties in the coming trade talks. An exemption list of just 16 items will not change China’s stance,” she said.
Indeed, the exempted list pales in comparison to over 5,000 types of US products that are already subject to China’s additional tariffs. Moreover, major US imports are still subject to hefty additional duties as China ramped up imports from Brazil and other supplying countries.
Beijing has said it would work on exempting some US products from tariffs if they are not easily substituted from elsewhere.
Analysts have noted that with duties on soybeans and other key imports such as US-made cars, China is taking aim at a key political support base of US President Donald Trump, mainly the factories and farms across the Midwest and South at a time of receding momentum in the world’s top economy.
China has imposed several rounds of duties on US goods in retaliation against US Section 301 tariffs, beginning last year in July and August with a 25% levy on about $50 billion of US imports.
In all, the world’s two largest economies have slapped tit-for-tat tariffs on hundreds of billions of dollars worth of goods in a bitter trade war that has dragged on for well over a year and raised the spectre of a global recession.
The items on the two tariff exemption lists – posted on the ministry’s website – will not be subject to additional duties imposed by China on US goods “as countermeasures to US Section 301 measures”, the ministry said in its statement.