China just waived import tariffs on more than a dozen US goods. It’s the first time Beijing has issued such exemptions since the US-China trade war began.
The Chinese government issued tariff exemptions on 16 products, including shrimp, fish meal and cancer treatment drugs. Chinese importers can apply for a refund of tariffs already levied on 12 of the products. Four products, including whey, are eligible for the exemption but not for refunds.
The exemptions will start Sept. 17 and last for a year. The move is notable because it comes ahead of the next round of face-to-face talks between US and Chinese officials in Washington. But analysts pointed out that the exemption list didn’t include major goods subject to tariffs, like soybeans or meat.
“Chinese tariffs that really matter are the ones on US agricultural and manufacturing goods, produced mainly in states with strong support for [President] Donald Trump,” said Artur Baluszynski, the head of research at Henderson Rowe. “We just don’t see China willing to negotiate on them before the race for US presidential elections really kicks off.”
Iris Pang, economist for Greater China at ING, added that while the exemptions could be seen as a “gesture of sincerity,” they are “probably more a means of supporting the economy.”
The trade war is weighing on the Chinese economy, which is suffering a major slump in growth. And tariffs have only been getting more severe lately. The United States has levied tariffs on Chinese goods worth hundreds of billions of dollars. Beijing has retaliated with its own tariffs that target more than 5,000 US products. Some of those have already taken effect, while others are expected to take effect in the coming weeks.
China’s State Council Tariff Commission, which made Wednesday’s announcement, said it will continue to review exemption requests and announce new lists in the future.
Beijing is also finding other ways to offset the pain brought on by tariffs, including diversifying its sources of agricultural imports. On Tuesday, Argentina’s agricultural ministry announced that China would allow the import of soybean meal from that country. Soybean meal is Argentina’s largest export product.
Soybean farmers in the United States have been hit particularly hard by the trade war. China was their biggest market before the outbreak of hostilities and buys a majority of the world’s soybean production.
If China doesn’t resume purchases of US soybeans this year, then Argentina is capable of filling the gap in demand, according to Tian Yaxiong and Shi Lihong, analysts at China Futures, a brokerage firm based in Chongqing.
Argentina isn’t the only South American country that China’s soybean industry is turning to because of the trade war — Chinese farmers have also stepped up imports from its neighbor, Brazil.