News Article

Chinese importers are requesting tariff waivers on US goods

After the Minister of Finance stated that it would begin making requests, Chinese importers prepare applications for exemption of export duties levied on more than 700 US products in the Sino-U.S. trade conflict.

Last week, the Ministry of Finance published a roster of products for which waivers could be awarded, including meat and poultry, soya, carbon and metal waste.

The waivers are in response to tariffs enforced by Washington in July of last year on US$ 50 billion of US products. Since the bitter trade war, Beijing has placed extra tariffs on thousands of products.

“We’re designing our request, and we’re going to send our products shortly,” said Shi Lei, Beijing Hopewise’s meat importer manager. “This is excellent news for us,” Beijing said last month that it would begin a waiver program, given increasing concerns about the expense to its slow economy of prolonged conflict on trade.

Tractors, bicycles, hill bicycles and specific medical equipment are other items on the roster.

“The waiver of import tariffs is a sign that China doesn’t want to trigger major disputes with the United States and gives out a message that the country is still in the opening phase,” says Hwabao Trust economist Nie Wen.

Applicants must register for these waivers from 3 June to 5 July. Tariffs enforced on 60 billion dollars of products in September of last year will be given a second set of exemptions.

The Ministry said that on Sept. 2 the implementation method for these waivers would begin.

“The applicants should be involved in goods in China, including importers, customers and manufacturing organisations,” the declaration adds, stating that certain waivers can be retroactively implemented.

In creating requests, industrial organisations were urged to portray their employees.

Applicants need to clarify whether their and their industries have been “seriously harmed by imports.” They must also explain whether U.S. exports have options.

The ministry did not tell when exemptions were given.

Some importers speculated on who and on what grounds could waivers be awarded.

“The strategy is primarily directed at companies which purchased and reserved US (soybean) deliveries in the course of the trade truce before, primarily State firms, to ease their burdens,” said a contributor at a state-owned company, which refused to be recognized as a result of its sensitivity.

“But if you now record the deliveries from the US, you are doubtful to get the waiver, which is not backed by such opportunist operations,” he explained.

From December, China purchased some 14 million tons of US soybeans as the portion of a temporary truce in the spat trade between the bottom two world markets.

However, for certain commodities like coal, importers can search for faster and better options than waivers for US supplies.

“Although China is beginning to recognise waiver requests, I believe it will not simply encourage individuals to purchase U.S. coal,” said a coal trader based in Beijing. “(it’s) low heat, high sulfur, and arriving in China requires too soon as its competitors.”

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