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12 May, 2020 09:26

China lifts tariffs on US goods despite Trump’s threat to rip up trade deal

China lifts tariffs on US goods despite Trump’s threat to rip up trade deal

A new list of US products to be exempt from trade tariffs has been announced by China’s finance ministry on Tuesday. It said the new waivers will take effect on May 19 and expire on May 18, 2021.

The exemptions cover 79 products in total, including rare earth mineral ores, aircraft radar equipment, semiconductor parts, medical disinfectants, and a range of precious metals, chemical and petrochemical products.

Importers in China will have to apply to the General Administration of Customs within six months of the announcement to be considered for waivers, which are effective from May 19.

The first batch of exemptions was announced in September 2019. It included major agricultural commodities such as soybeans and pork, as well as petrochemical products.

On Friday, the two countries’ top trade negotiators held their first telephone call since the Phase 1 deal agreement in January. Under the deal, China agreed to increase its purchases of US goods from a 2017 baseline by $200 billion over two years, with around $77 billion in increased purchases in the first year and $123 billion in the second year. In return, the US promised to slash tariffs from 15 to 7.5 percent on $120 billion worth of Chinese goods.

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At a press conference on Tuesday, Chinese Foreign Ministry spokesman Zhao Lijian said the two nations should implement the deal with equality and mutual respect. The agreement is beneficial for both sides, along with the rest of the world, he said.

US-China bilateral trade nosedived in the first four months of the year as supply chains on both sides were severely disrupted by coronavirus lockdowns. Customs data showed that China’s imports of US goods dropped by 11.1 percent in April, and by an unprecedented 85.5 percent in March. US President Donald Trump has threatened to terminate the deal if China fails to meet its purchase commitments.

The Covid-19 pandemic has worsened the already strained relations between the world’s two largest economies, with Washington accusing the Chinese government of “covering up” the initial coronavirus outbreak in December, and of obstructing Western efforts to investigate the virus’ origin. US Secretary of State Mike Pompeo has said Washington has “significant evidence” that the coronavirus originated in a laboratory in Wuhan, China. Beijing has called Washington's claims “groundless accusations.”

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