U.S. President Joe Biden’s administration will reinstate tariff exemptions on 352 products imported from China, accounting for about two-thirds of waivers that had expired at the end of 2020. The exemptions will apply retroactively from last October until the end of 2022. Biden made the decision after a public comment period that the U.S. Trade Representative (USTR) announced last October. Companies were asked to comment on whether affected goods could be sourced from countries other than China, whether product procurement had been affected by global supply chain shifts and if there was domestic capacity to manufacture the products. “The focus of the evaluation will be whether, despite the first imposition of these additional duties in September 2018, the particular product remains available only from China,” the USTR said at the time.
In a statement announcing the waivers, the USTR said that the determination had been made “after careful consideration of the public comments, and in consultation with other U.S. agencies.” The USTR also sought input from the White House’s Covid-19 response team, suggesting efforts by the Administration to minimize the effects of the trade dispute on pandemic-related supplies. Applying to 352 of the 549 product types up for consideration, the exclusions include consumer goods like household appliances and bicycles, manufacturing components like electric motors, and some medical equipment such as X-ray hardware.
Given that a product’s availability outside of China was a key consideration in the exclusion process, reinstatement of the waivers was “clear evidence China is critical to the global supply chains that benefit American businesses and consumers,” said David Adelman, Managing Director at KraneShares, an asset management firm focused on China. The waivers constitute a small fraction of the total amount of goods targeted by tariffs put in place during the Administration of former President Donald Trump. They eventually expanded to cover some USD300 billion worth of imports from China – around two-thirds of all Chinese goods exported to the U.S.
In a letter to USTR Katherine Tai last month, a bipartisan group of 41 Senators called for a full exclusion process where all goods would be eligible for consideration, charging that: “the current narrow exclusion process denies many a fair shake, and instead picks winners and losers among businesses.” The Senators also criticized the Administration for only retroactively applying the waivers as far back as October, meaning that importers of those goods would have paid some 10 months’ of tariffs from when the exclusions expired at the end of 2020. The Chinese government hit back with its own tariffs on U.S. imports, covering just over 58% of goods with duties, the South China Morning Post reports.
Shu Jueting, Spokesperson for China's Ministry of Commerce (MOFCOM) said the move is conducive to the normal trade of these goods, but hoped the U.S. would cancel all additional tariffs it has imposed on Chinese products soon to push the bilateral economic and trade ties back on the right track as early as possible.
