Sep 11, 2019

China exempts import tariffs on some U.S. goods ahead of trade talks

Photo: Johannes Eisele/AFP/Getty Images

China's Ministry of Finance announced in a statement Wednesday that it's exempting 16 types of exported U.S. goods from import tariffs ahead of stalled trade talks resuming with the Trump administration. The exemption is effective Sept. 17 through Sept. 16, 2020.

Why it matters: President Trump's trade war has led to bigger trade deficits with China, it's dented consumer sentiment, and the International Monetary Fund has said the prolonged tensions weighed down the global economy.

  • A survey by the American Chamber of Commerce in Shanghai released Wednesday found 51% of the business lobby's responding members said U.S. and Chinese tariffs had hurt revenue, though the interrelated issue of China's economic weakening was a more pressing factor, the Wall Street Journal reports.

What's happening: Goods to be exempted from China's tariffs include cancer drugs and some chemicals. Bloomberg notes that U.S. agricultural items such as soybeans and pork were not included on the list that would be exempted from the 25% tariffs.

  • The Ministry of Finance issued 2 lists of items for exemption. Per CNBC, which translated the documents, tariffs already imposed on goods to be exempted on "List 1" will be refunded. Products on "List 2" were said to be non-refundable, according to CNBC.

The big picture: The Trump administration and the Chinese government agreed last week to restart trade negotiations with in-person meetings in Washington, D.C., in early October.

The state of play:

  • On Sept. 1, the U.S. imposed a 15% tariff on $112 billion worth of Chinese goods. China retaliated by resuming 25% tariffs on American cars and adding 5–10% tariffs on $75 billion worth of goods.
  • On Oct. 1, Trump was due to increase existing tariffs on $250 billion worth of Chinese goods from 25% to 30%.
  • On Dec. 15, the U.S. was set to hit another batch of $160 billion of Chinese imports with 15% tariffs, originally delayed to reduce the impact on Christmas shoppers. China vowed to retaliate with its second batch of tariffs on $75 billion of American goods.

Editor's note: This article has been updated with new details throughout.

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Trump delays tariff increases on Chinese goods ahead of trade talks

Photo: Thomas Peter-Pool/Getty Images

President Trump announced on Twitter Wednesday he would delay the increase on existing tariffs on $250 billion worth of Chinese goods ahead of the U.S. resuming trade talks with China.

Why it matters: There's evidence that the U.S.-China trade war has hurt both of the world's 2 leading economies. It's dented consumer sentiment and a survey of members of the American Chamber of Commerce in Shanghai released Wednesday found 51% said U.S. and Chinese tariffs had a negative effect on revenue.

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The cost of Trump's tariffs

Data: U.S. Census Bureau via Tariffs Hurt the Heartland; Note: Lists 1-3 refers to USTR designation of Chinese imports subject to tariffs; Chart: Andrew Witherspoon/Axios

Tariffs imposed by President Trump have so far cost U.S. corporations $34 billion, according to data compiled by Tariffs Hurt the Heartland — a coalition of businesses and trade groups that oppose the tariffs — provided first to Axios.

Why it matters: Trade negotiations are set to resume Thursday, and corporate America is hoping the U.S. and China — whose tit-for-tat battle has cost companies the most — strike a truce.

Go deeperArrowOct 9, 2019

China cancels U.S. farm visits while Trump holds out for a "big deal"

Trump meets in the Oval Office on Sept. 20. Photo: Saul Loeb/AFP/Getty Images

Trade negotiators from China cancelled visits to meet farmers in Montana and Nebraska on Friday, around an hour after President Trump said he was interested in a "big deal," not “a partial deal” with China, the Washington Post reports.

The big picture: The U.S. trade war with China has reduced U.S. employment by 300,000 jobs, compared with likely employment levels absent the trade war, Moody’s Analytics estimates. The National Foundation for American Policy estimates that tariffs will cost U.S. households $2,000 each by next year.

Go deeperArrowSep 20, 2019