China extends tariff exemption on certain U.S. goods

China will continue to exempt certain U.S. goods from additional punitive tariffs until April 30 next year, the Customs Tariff Commission under the State Council said in a statement on Wednesday, a move that observers called reciprocal move after the U.S. announced similar exemptions last week.

According to an official statement, certain items from the U.S. were excluded from China's countermeasures against the U.S. Section 301 measures until September 15, 2023.

The tariff exemptions involve such products as lubricating oil, metals, forging machines, laser products and healthcare products, according to a list published on the website of Ministry of Finance.

China's extension move came after the office of USTR announced last week the further extension of 352 reinstated exclusions and 77 COVID-related exclusions in the China Section 301 investigation until December 31 this year. The extension was to expire at the end of September.

The U.S.-initiated additional tariffs on more than $350 billion worth of Chinese goods came into effect in July 2018 as part of former U.S. President Donald Trump's tariff war against China.

The enduring Section 301 tariffs should have expired in the summer 2022 but the USTR extended the timeline for the measures. In May 2022, the USTR commenced the statutory four-year review process.

The Biden administration expects to complete the review in fall of this year, USTR Katherine Tai told the Senate Finance Committee in written responses to questions, the U.S. media outlet Politico reported in July.

Since September 2019, China has extended several exemptions for U.S. goods subject to retaliatory tariffs, following similar extensions by the U.S. of tariff exemptions.

China's move on Wednesday came as expected as the two countries have forged certain tacit understanding in waiving tariffs on some products that are urgently needed by either side, Hu Qimu, deputy secretary general of the digital-real economies integration Forum 50, told the Global Times.

However, it does not mean the Biden administration will make major changes on the enduring tariffs after the review given the mounting political pressure it meets amid a heating-up presidential election campaign, Gao Lingyun, an expert at the Chinese Academy of Social Sciences in Beijing, told the Global Times.

"But some subtle revisions in a technical way could be expected, possibly an exemption or suspension of tariffs on certain products," Gao noted.

The Chinese Ministry of Commerce has repeatedly called on the U.S. to cancel all additional tariffs imposed on China as soon as possible and work with the Chinese side to maintain the stability of global industrial and supply chains for the benefit of the two peoples and the world.

"Tariffs under Section 301 are typical unilateralism and trade protectionism, which have seriously interfered with the normal conduct of bilateral trade between China and the U.S., undermining the stability of the global industrial and supply chains, and U.S. importers and consumers have been deeply affected by them," Shu Jueting, a spokesperson for the ministry, said early this year.