U.S. Restores Waivers for Some Chinese Goods Hit by Tariffs
U.S. Restores Waivers for Some China Goods Hit by Trump Duties
(Bloomberg) -- The Biden administration plans to reinstate exemptions from Trump-era tariffs on about two-thirds of Chinese products that were previously granted waivers, most of which expired by the end of 2020.
The U.S. Trade Representative’s office is reinstating the exclusions for 352 items, it said in a statement on Wednesday. The reinstated exclusions include a wide variety of machinery, manufacturing components and consumer goods, ranging from television-screen parts to backpacks, bicycles and pillows.
The world’s two largest economies have fought a trade war since 2018. The U.S. imposed tariffs on more than $300 billion in imports from China, ranging from footwear and clothing to electronics and bicycles and even pet food, after an investigation that concluded China stole intellectual property from American companies and forced them to transfer of technology. Despite that, China continued to export a record amount of goods to the U.S. amid the pandemic.
U.S. lawmakers already complained last month that the scope of the exclusions being considered was too narrow. The U.S. Chamber of Commerce has asked that the duty exclusions be reinstated and the scope of the exemption process broadened.
The Trump administration had originally granted more than 2,200 exclusions. Most were allowed to expire, but 549 were extended for a year.
“These 352 extensions are a tiny sliver of a much bigger game,” said Jack Zhang, assistant professor at the University of Kansas (KU) and director of the KU Trade War Lab. “I think the exclusion process is a clever political strategy to divide business opposition to the trade war and make companies compete, rather than uniting to push back against tariffs.”
Beijing and Washington called a truce in the trade war in early 2020 when China made commitments to increase imports from the U.S over the next two years. China’s imports fell short of those commitments though, partly due to the impact of the pandemic. U.S. Trade Representative Katherine Tai has repeatedly said the Biden administration’s concerns go beyond the purchase commitments and include Beijing’s state-centered industrial policy.
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China’s commerce ministry said the exemptions would help facilitate “normal trade” of related goods, while also calling on the U.S to remove all remaining restrictions.
It hopes the U.S. can “cancel all additional tariffs on China as soon as possible and bring the bilateral economic and trade relations back to the normal track as soon as possible,” spokeswoman Shu Jueting said Thursday at a regular briefing in Beijing.
The main considerations in whether to reinstate the exclusions were whether a product or comparable product was available from sources in the U.S. or in third countries, and changes in the global supply chain since 2018. They also included efforts by importers or U.S. purchasers to source the product from the U.S. or third countries, and domestic U.S. capacity to produce the product.
Large companies are more effective at lobbying to have items they’ve import excluded from tariffs, said KU’s Zhang.
“There won’t be much of an impact on total trade because if you are a big company, you have other means to get around tariffs and more leverage to pass costs on to customers,” he added.
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