Is the U.S. resumption of tariff exemptions on some Chinese goods a concession or a routine?

The U.S. government on Wednesday announced the reinstatement of tariff exemptions for some Chinese imports. China welcomes this and urges the United States to lift all tariffs on China. Against the multiple backgrounds of the Russian-Ukrainian war and inflation, why did the United States make such a decision at this time?

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The U.S. Trade Representative's office said it would restore tariff exemptions for 352 Chinese imports, but that was nearly 200 fewer than the 549 items that were originally under consideration. The agency said it made the decision after careful consideration of public feedback and consultation with other government departments. The exemption decision will be valid from October 12 last year until the end of this year.

Chinese Commerce Ministry spokeswoman Shu Jueting told a regular news conference on Thursday that the U.S. move would help normal trade in related products, and she called on Washington to lift tariffs on all Chinese goods.

When asked about the matter, Chinese Foreign Ministry spokesman Wang Wenbin did not respond directly on the same day, but reiterated China's expectations for the economic and trade relations between the two countries.

"As a principle, China has always believed that the essence of China-US economic and trade relations is mutual benefit and win-win results, and there is no winner in a trade war."

Since 2018, former US President Trump has imposed four additional rounds of tariffs on Chinese products, but more than 2,000 products have been exempted from tariffs, most of which have not been extended, and only 549 products have received one Years of waiver extension. However, the extension period ended before Biden became president.

The decision was made this week after U.S. Trade Representative Katherine Tai announced last October that it would evaluate whether to continue exempting more than 500 items from tariffs, followed by public consultation.

The reporter noticed that the Chinese products that will be exempted from tariffs cover several major categories such as machinery, chemicals, and daily necessities. Specific products include specific types of industrial pumps, electric motors, crab meat, backpacks, bicycles, vacuum cleaners, and more.

U.S.-China relations are becoming more nuanced

The US government made this decision at a time when the international situation and US-China relations are quite delicate. Relations between the U.S. and China have been strained since Russia invaded Ukraine last month, as Beijing has refrained from condemning Putin's government and opposed Western sanctions on Russia.

U.S. economist Robert Blohm believes that Washington's resumption of tariff exemptions on some Chinese goods may be an attempt to ease tensions between the two countries and prompt China to play a more active role in the Russia-Ukraine war.

"If the U.S. government doesn't do this, it will obviously put more pressure on China. I think Biden still wants China to mediate the Ukraine crisis, so why would he put more pressure on China until that goal is achieved?"

In a statement, the USTR said it considered reinstating or not reinstating the waivers, the impact on the submitters and other U.S. interests, and whether it would cause them serious economic harm, including to small businesses, jobs, manufacturing impact on industrial output and critical supply chains. The announcement added that they also considered the effect of the waiver decision on eliminating China's unfair trade practices.

The agency also said it took into account factors such as whether a particular item is available in the U.S. or a third country, whether changes in global supply chains have affected the availability of a particular item, and U.S. capacity for a particular item when conducting its waiver assessment.

Tariff exemptions linked to U.S. inflation?

It is worth noting that when reporting on the matter, several Chinese media outlets attempted to link the decision to inflationary pressures in the United States. Sohu Finance quoted Mei Xinyu, a researcher at the Institute of International Trade and Economic Cooperation of the Chinese Ministry of Commerce, as saying that the exemption from tariffs on some Chinese goods is only to ease inflationary pressures in the United States from the supply side.

But Katheryn Russ, a senior fellow at the Peterson Institute for International Economics, wrote in January that only a small portion of the current high inflation in the United States is due to tariffs on Chinese goods. The removal of all additional tariffs on China would only reduce the U.S. consumer price index (CPI) by 0.26 percentage points, and its effect would be very limited, the article said.

He Qinglian, a Chinese economic and sociologist who now lives in the United States, said that the symbolic meaning of the United States retaining most of its tariffs on China is obviously greater.

"The continuation of the tariffs shows that the U.S. does not see China as an ally or a partner and still has some punitive action to take."

A number of bipartisan lawmakers in the U.S. Senate and House of Representatives recently introduced a bill calling for the cancellation of China's "Permanent Normal Trading Relations" (PNTR) status to punish China for its massive human rights abuses.