China relaxes customs duties on certain products to mitigate economic impact of US trade conflict
Revised Article
In a move that could signal a de-escalation of the ongoing trade war, China has started reaching out to US companies, asking them to identify critical imports they need exempted from tariffs. This is the clearest indication yet that Beijing is concerned about the economic fallout of the trade war.
The exemptions, which have been met with relief by businesses and investors, could provide a potential avenue to de-escalate tensions, according to Alfredo Montufar-Helu, a senior adviser to the Conference Board's China Center. However, Montufar-Helu notes that neither the US nor China are keen to be the first to reach out for a deal.
The United States Treasury Secretary, Bessent, has remarked earlier that China's tariffs are not sustainable as the US prepares to de-escalate. The potential tariff exemptions under consideration by Beijing could offer cost relief for companies in China and alleviate pressure on US exports.
Reports suggest that the Chinese government is seeking details about U.S.-imported goods that are critical to Chinese companies’ operations, as they fear shutting down their supply chains otherwise. These critical goods are thought to range across several industries, including aerospace, pharmaceuticals, industrial chemicals, and certain tech components.
For instance, several pharmaceutical companies are believed to have been granted tariff exemptions, although these seem to be drug-specific, rather than industry-wide. China's reliance on the US for key imports, such as the petrochemical ethane needed to make plastics and some drugs, potentially explains these exemptions.
It's worth noting that while China has repeatedly stated its readiness to engage in a prolonged trade war, China's economy is facing heightened concern over rising unemployment, deflationary pressures, and mounting backlogs of unsold exports. This could potentially make Beijing more open to deals that alleviate pressure on its economy.
Nevertheless, the path to an agreement is uncertain, with disruptions in supply chains and core trade disputes yet to be addressed. Emily Whittaker, an expert in international trade, posits, "Exemptions for critical goods are a step in the right direction, but without a comprehensive deal, the trade war between the US and China is far from over."
- The interested parties might find some relief with the potential tariff exemptions China is considering, as these could alleviate pressures on US exports and provide a commodities-focused solution.
- AstraZeneca, along with other pharmaceutical companies, is reportedly one of the recipients of tariff exemptions, which seemingly apply to drug-specific products rather than entire industries.
- The finance sector might be cautioned by the uncertainties associated with the general-news events concerning the ongoing trade war and potential dealings, as China's economy faces rising concerns of unemployment, deflationary pressures, and backlogs of unsold exports.
- Beijing's move to ask US companies to identify critical imports they need exempted from tariffs points to an ongoing concern about the business implications of the trade war, suggesting that the Chinese government seeks to protect strategic commodities in their industries, such as aerospace, pharmaceuticals, industrial chemicals, and tech components.
- In the realm of politics and international trade, Emily Whittaker's analysis suggests that although exemptions for critical goods are a positive step, a comprehensive deal between the US and China is necessary to resolve the ongoing trade war, as supply chain disruptions and core trade disputes remain unaddressed.
