In what could be the most positive move yet in the China-U.S. trade war, U.S. President Donald Trump will exempt 400 Chinese products from the weighing tariffs that the White House imposed last year.
According to CNBC, the exemption is temporary, based on documents set to be publicized on Friday. On the other hand, Washington's move is considered as one of the most positive developments yet in the ongoing trade dispute.
Three documents will be released by the Office of the U.S. Trade Representative wherein the items included in the exemption are plastic straws, Christmas tree lights, some types of water fountains, and more. Overall, a total of 437 items will be freed from tax duties.
More details will be released by the USTR later in the day but basically, the decision was made after a joint effort by entities and companies in the United States who want to continue doing business with China.
Research Fellow at the Hinrich Foundation, Stephen Olson, commented that the exemption of multiple Chinese goods from U.S. tariffs could be labeled as an agreement by both sides that escalating the trade war further will not do any good for both countries.
Washington's move came about a week after the Chinese Ministry of Finance said it will exempt 16 U.S. product lines from tariffs that Beijing implemented as it followed suit to the American leader's tax duty impositions.
For Nick Marro, global trade lead at The Economist Intelligence Unit, the positive progress in the trade tensions could help pave the way for sending goodwill signals to both sides as they prepare for trade negotiations next month.
White House adviser Michael Pillsbury said on Thursday that Trump is definitely ready to further escalate the trade war if a deal is not put on the table anytime soon. According to the South China Morning Post, Pillsbury explained that if ties completely get deterred, it would be a result of a "no-deal" scenario.
Pillsbury warned that Trump has options to raise the already high tariffs that American companies have raised qualms about. He added that the U.S. president also has another option in the form of financial markets.
It remains to be seen if Pillsbury's statements will come true. However, Friday's expected release of documents of freeing some Chinese goods from tariffs could be a contradiction of the Washington adviser's comments.
The tariff exemption, which was first reported by Politico, will end next year in varied timelines but all over 10 months. Delegations from both sides resumed talks on Thursday for the first time in almost two months. Negotiations are expected to wrap up on Friday.