Chinese Firms Asking For Tariff Exemption To Purchase US Agricultural Products

US Farm Products
Corn is loaded onto a truck as a silo is emptied at a farm in Tiskilwa, Illinois (Photo: Reuters / Daniel Acker)

An undisclosed number of Chinese companies are reportedly requesting for tariff exemptions in order to purchase agricultural products from the United States. The exemptions are reportedly for the added tariffs imposed on the companies by Beijing as part of retaliatory tariffs in the country's ongoing trade dispute with the United States.

According to local media reports, which cited sources close to the matter, the applications for exemptions have already been filed and are set to be heard by a panel of government trade experts.

The report did not elaborate on the timeframe for the review process nor did it reveal the names of the companies that had submitted the requests.

The application requests were revealed to be part of an apparent agreement that was reached between US President Donald Trump and Chinese President Xi Jinping during their meeting at the sidelines of the G20 summit in Japan last month.

State-run media reports have revealed that Trump is considering the lifting of levies for around 110 Chinese products that include medical equipment and electronic components.

As part of the agreement, Trump apparently promised to suspend the imposition of new tariffs on certain Chinese goods.

The American president also reportedly vowed to allow US firms to continue doing business with "relevant Chinese companies."

This was likely a reference to the Chinese telecommunications equipment giant Huawei and the possible lifting on US' trade ban against it.

Trade negotiation between China and the United States initially broke down after Trump accused China of backtracking on its promises to increase its agricultural imports.

The reports of the Chinese companies now applying for tariff exemptions have been seen by some as a good sign of renewed trade negotiations. However, some analysts are still cautious about placing too much hope on the move restarting talks.

Analysts speculate that China's move to increase its purchase of US farm products may help to restart negotiations, but it is definitely not a decisive factor. China is likely not going to be able to meet all of Trump's demands, which the country has repeatedly stated was too unreasonable.

However, the country's decision to positively respond to Trump's suspension of tariffs on certain goods is a step forward to an eventual resolution to the year-long trade dispute.

News of the possible increased Chinese imports of US farm goods has had a positive effect on equities throughout the country, but analysts have remained skeptical. Lu Xiang, a US specialist with the Chinese Academy of Social Sciences, stated that it is important not to read too much into the recent turn of events. Lu explained that there are still no certainties that the trade talks would resume and that the US remains to still be very unpredictable.

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