China exempts non-essential US products from Retaliatory tariffs

Economists warn that trade war is slowing global growth

China announced on Wednesday that it plans to exempt 16 categories of US products from tight Retaliatory tariffs imposed in the context of the trade war between the two countries before a new round of trade negotiations begins next month.

According to the Customs Tariff Commission of the State Council, the exemptions will take effect on 17 September.

The Commission issued two lists containing seafood products, medicines for cancer, animal feed and some lubricants, according to a statement from the Ministry of Finance.

“The goods on the two lists of customs exemptions posted on its website will not be subject to the additional tariffs imposed by China on US goods,” the Ministry said.

This is the first time China publishes such a list since it imposed a 25-percent tariff last year on a range of products imported from the United States.

Strict tariffs will remain on basic products such as soy and pork.

However, the government made clear on Wednesday that other lists of tariff-free products could be released “in due course” after studying the issue.

Despite the tension between the two countries, China and the United States confirm that dialogue is continuing. Negotiators from both sides will meet in early October in Washington.

Furthermore, White House economic adviser, Larry Kudlow said earlier that trade negotiations between China and the United States are resuming amid calm conditions despite imposing new tariffs recently, but declined to make predictions about the outcome of the upcoming negotiations.

“A meeting between Chinese and US negotiators is scheduled for early October in Washington. I think it’s very important and considered a positive development,” Kudlow told CNBC.

Kudlow added: “I cannot predict the outcome of these new talks,” drawing lessons from previous rounds of negotiations that have all failed to reach an agreement.

“I just say it’s a good thing that they will come and the atmosphere is much quieter,” Kudlow continued.

“We are currently engaged in very important talks at all levels, from agriculture and intellectual property to technology transfer, computer piracy, or trade barriers,” Kudlow said.

By the end of this year, Trump plans to impose tariffs on almost all imports from China (worth about $540bn based on 2018 imports).

Economists warn that trade war is slowing global growth. The IMF also stressed before the impact of the Chinese economy.