China Announces First Tariff Exemptions On US Goods

China's Finance Ministry on Sept. 11 announced the first round of exemptions of U.S. goods from Chinese retaliatory tariffs.

The exemptions will be effective from Sept. 17 to Sept. 16, 2020.

Specifically, the exclusions will cover two lists — one comprising 12 items and another comprising four items. 

For the first list, affected import enterprises will be allowed to apply for refunds of duties collected within six months before Sept. 11. Goods on the second list won't be eligible for tariff refunds, the Chinese Finance Ministry said.

The Customs Tariff Commission of the State Council of China will continue to work on the exemption process and release subsequent lists in the future, the commission said in a statement.

The exemptions will apply to goods including lubricants, anti-cancer drugs and animal feed ingredients whey and fish meal, Reuters reported.

China's tariff exemptions come weeks ahead of planned bilateral trade talks in Washington, DC, and about two weeks after the Office of the U.S. Trade Representative (USTR) released notices announcing tariff increases for nearly all imports from China.

Some U.S. tariffs across approximately $263 billion worth of annual imports from China — originally planned for a rate of 10% — took effect at a rate of 15% on Sept. 1, after USTR announced increases. The rest of the 15% tariffs applying to this tranche of goods will take effect on Dec. 15.

Product groups on the Sept. 1 list include apparel, TVs and monitors, agricultural and livestock products, and metals, and the largest product groups on the Dec. 15 list include phones, laptops, toys/games and other apparel.

USTR released another notice that will increase current 25% tariffs across approximately $250 billion worth of goods from China to 30% starting Oct. 1.

The USTR notices came after China's State Council on Aug. 23 announced that it would increase tariffs on $75 billion worth of U.S. exports from 5% to 10%, split between one phase that took effect on Sept. 1 and another phase that will take effect on Dec. 15.

The National Retail Federation (NRF) recently reported that shippers responded to the last round of tariff increases on imports from China by front-loading containers into U.S. ports in July, and NRF is projecting that container volumes will rise in October and peak in November.

July saw 1.96 million twenty-foot equivalent units (TEUs), up 9.1% from June and 2.9% year-over year, NRF said.

The U.S. Chamber of Commerce and China's Center for International Economic Exchanges on Sept. 10 started a high-level meeting to discuss leading economic and commercial policy issues in U.S.-China relations, including trade, the chamber said in a statement.

"The uncertainty produced by U.S.-China trade tensions is exerting significant downward pressure on both economies," chamber Executive Vice President and Head of International Affairs Myron Brilliant said in a statement. "The time is now to strike a deal that addresses the U.S.' legitimate concerns about market access, forced technology transfer, subsidies and digital trade, while concurrently removing punitive and retaliatory tariffs."

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