China Exempts 16 Types of US Goods from Additional Duties

Traders work on the floor at the New York Stock Exchange Sept 9 2019

China’s Xi ‘Can’t Believe What Trump Says’ Regarding Trade War

China has announced some US industrial chemicals will be exempt from tariff hikes imposed in a trade war with Washington but maintained penalties on soybeans, pork and other farm goods.

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

The Commission issued two separate tariff exemption lists.

China announced Wednesday it would exempt 16 categories of products from United States tariffs, ahead of a fresh round of trade talks next month.

Next, the commission will continue to work on the exemption process and release subsequent lists in due course, according to the statement.

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

Both sides raised tariffs on each others' goods on September 1 in the trade war's latest escalation, and the US plans to add more tariffs on October 1. The rest of the 15% tariffs applying to this tranche of goods will take effect on December 15.

Wednesday's lists do not include big-ticket items such as soybeans and pork. Tariffs already imposed on these items are deemed non-refundable. Moreover, major US imports, such as soybeans and pork, are still subject to hefty additional duties, as China ramped up imports from Brazil and other supplying countries.

Preliminary meetings are set to take place later this month in Washington before United States treasury secretary Steven Mnuchin and trade representative Robert Lighthizer meet China's vice premier Liu He in October. That will be followed by highly-anticipated minister-level meetings in early October in the U.S. capital, involving Chinese Vice Premier Liu He, U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin.

"These adjustments signal that China is more willing to make progress in the October trade talks, likely toward striking a "narrow" agreement that involves China buying more U.S. goods in exchange for the United States suspending further tariff hikes", Barclays analysts said in a research note.

In a tweet early Wednesday, US President Donald Trump noted the tariff exemptions, saying the trade war was proving more costly for China than previously thought.

Xi further complained to Abe that while the Trump administration has repeatedly criticized Beijing for supporting state-owned companies with subsidies, "the also providing Boeing with subsidies", referring to the Chicago-based US airplane manufacturer.

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