China announces new US duty-free import volume
China has published a list of the second batch of goods that will be exempt from trade duties for the United States, which will be in effect from next week for one year.
In total, the list, published on Tuesday by the country’s finance ministry, contains 79 products, including rare earth mineral ores, aviation radar equipment, semiconductor parts, medical disinfectants, as well as a range of precious metals, chemical and petrochemical products..
Importers in China must contact the General Administration of Customs within six months of the announcement of the waiver of duties, which will take effect on 19 May..
The first batch of exemptions was announced in September 2019 and included major agricultural commodities such as soybeans and pork, as well as petrochemicals.
The announcement came at a difficult time in US-China relations, with exaggerated rhetoric on both sides. President of the U.S.A Donald Trump Threatened last week to break off a Phase 1 trade deal signed in January if China does not increase imports of US goods, as stipulated in the procurement agreement.
As supply chains on both sides have been severely disrupted by the coronavirus outbreak, bilateral trade has declined in the first four months of the year.
Customs data released last week showed that imports of Chinese goods from the United States fell 11.1% in April and 85.5% in March..
Given that China imported far fewer goods in 2019 than in 2017 (the baseline scenario used to determine the terms of the trade deal), it is not close to meeting the targets. China is expected to have to double its monthly US imports to achieve them.
Chinese Foreign Ministry spokesman at a press conference in Beijing on Tuesday Zhao Lijian stated that both countries must implement the agreement on the basis of equality and mutual respect, adding that the deal is beneficial to both parties and the rest of the world.
The Heat: US announces list of Chinese goods subject to possible tariffs
In an editorial published on Monday in the newspaper «Global Times», It was said that dissenting voices at home and recommendations to the Chinese government pushed for a renegotiation of the first phase of the deal, a proposal that was quickly rejected by Trump at a press conference in Washington on Monday.
Other goods that will be offered for exemption from trade duties include recombinant human insulin, halogen bulbs for trains, ships and aircraft, power generators, flight data recorders, some digital cameras, and gold ore..
Chief negotiators, including the Vice Premier of China Liu He and US Treasury Secretary Stephen Mnuchin and US Sales Representative Robert Lighthizer, held telephone calls on Friday, for the first time since signing the agreement in January.
A Chinese statement released by state media said that «favorable conditions are created for the implementation of the first trade agreement», while superpower tensions escalate over the fight against the coronavirus pandemic.
In a statement posted on the website last week, the Office of the US Trade Representative added that «both sides agreed that good progress has been made in building the government infrastructure necessary for the success of the agreement».
On Tuesday, Chinese analysts lowered the likelihood that the trade deal, which went into effect on Feb.15, took more than a year to negotiate..
Chen Fengying, a senior fellow at the China Institute of Contemporary International Relations, said that despite the rhetoric, there is no immediate threat to this deal, however, he suggested that there should be a place to discuss the purchase clause in light of the conditions of the coronavirus pandemic.
«This is not a normal time for both countries. China is still interested in buying American goods such as pork and soybeans, but the question is whether the United States can produce enough and ship them to China amid the coronavirus pandemic, she said. – Bulk buying is the hardest element [of the deal], fueling calls for a renegotiation».
Hee Weyven, a former senior official at the Chinese consulates in New York and San Francisco, now a senior fellow at the Center for the Study of China and Globalization (a government-affiliated research center), suggested that the impression was that there was no mutual deal in China.
«The deal came as part of a US trade duty hike and a Section 301 investigation. China promised many changes, but the US made a few concessions on a trade duty rollback», – he said.
As part of the first phase of the deal, the US agreed to cut tariffs from 15% to 7.5% on Chinese goods worth $ 120 billion. The Trump administration has since refused to cut other trade duties despite efforts by free trade lobbyists in Washington..