China issues tariff waivers for 16 US goods ahead of trade meet

Products to be exempted from Sept 17 include some anti-cancer drugs, lubricants

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 goods that include some anti-cancer drugs and lubricants, as well as the animal feed ingredients whey and fish meal, the Ministry of Finance said in a statement on its website yesterday.

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.

While some analysts view the move as a friendly gesture, they do not see it as a signal that either side is 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," she said.

She noted the US had also exempted imports of 110 Chinese products from tariffs in July, including high-value products such as medical equipment and parts.

The exempted list from China pales in comparison with over 5,000 types of US products that are already subject to China's additional tariffs.

Moreover, major US imports, such as soya beans and pork, 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. The United States is by far China's largest supplier of whey, which is an important ingredient in piglet feed and difficult to source in large volumes from elsewhere.

Analysts have noted that with duties on soya beans and other key imports like 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 per cent levy on about US$50 billion (S$69 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.

China's latest exemption will take effect on Sept 17 and be valid for a year to Sept 16 next year, said the finance ministry.

Yesterday's announcement comes before Chinese trade deputies are expected to meet their US counterparts in the middle of this month in Washington.

That will be followed by highly-anticipated minister-level meetings early next month in the US capital involving Chinese Vice-Premier Liu He, US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin.

Senior White House adviser Peter Navarro on Tuesday tamped down expectations for the next rounds of trade talks, urging investors, businesses and the public to be patient about resolving the two-year trade dispute between the US and China.

"If we're going to get a great result, we really have to let the process take its course," Dr Navarro said on CNBC, adding that the tariffs were "working beautifully".

However, a survey by a prominent American business association showed yesterday that the trade war is souring the profit and investment outlook for US companies operating in the world's second-biggest economy.




A version of this article appeared in the print edition of The Straits Times on September 12, 2019, with the headline 'China issues tariff waivers for 16 US goods ahead of trade meet'. Print Edition | Subscribe