China exempts some US goods from tariffs in lead-up to talks

Workers make desks for export to the US at a factory in Nantong in China’s Jiangsu province. The world’s two largest economies have slapped tit-for-tat tariffs on hundreds of billions of dollars worth of goods. (AFP)
Updated 11 September 2019
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China exempts some US goods from tariffs in lead-up to talks

  • Chinese trade deputies expected to meet with their US counterparts in mid-September in Washington

BEIJING: China announced exemptions for 16 types of US products from additional retaliatory duties, in a move that comes as trade negotiators from the two countries prepare to meet later this month to try to de-escalate their protracted tariff row.

The exemptions will apply to US goods including some anti-cancer drugs and lubricants, as well as animal feed such as whey and fish meal, the Ministry of Finance said in a statement on Wednesday.

In all, the world’s two largest economies have slapped tit-for-tat tariffs on hundreds of billions of dollars worth of goods in a bitter trade war that has dragged on for well over a year and hurt business investment, profits and global growth.

The items on the two tariff exemption lists — posted on the ministry’s website — will not be subject to additional duties imposed by China on US goods “as countermeasures to US Section 301 measures,” the ministry said in its statement.

The exemption will take effect on Sept. 17 and be valid for a year through to Sept. 16, 2020, it said.

However, the exempted list includes only a small quantity of items in comparison to more
than 5,000 types of US products that are already subject to China’s additional tariffs. Moreover, major US imports, such as soybean and corn, are still subject to hefty additional duties.

Wednesday’s announcement comes before Chinese trade deputies are expected to meet with their US counterparts in mid-September in Washington. That will be followed by minister-level meetings in early October in the US capital, involving Chinese Vice Premier Liu He, US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin.

The South China Morning Post reported, citing an unidentified source, that China was expected to buy more agricultural products in hopes of a better trade deal with the US.

But senior White House adviser Peter Navarro tamped down expectations for the next rounds of trade talks, urging investors, businesses and the public to be patient about resolving trade dispute.

Beijing has previously said it would work on exempting some US products from tariffs if they are not easily substituted from elsewhere. 

The US is by far China’s largest supplier of whey, which is an important ingredient in piglet feed and difficult to source in large volumes from elsewhere.

The Finance Ministry said it will consider more products to be exempted and will make further announcements “at appropriate times.”

Earlier on Wednesday, a survey by a prominent American
business association showed the trade war is souring the profit and investment outlook for US companies operating in the world’s second-biggest economy. 


Oil prices climb as Saudi capacity cushions impact

Updated 30 min 42 sec ago

Oil prices climb as Saudi capacity cushions impact

  • Kingdom pledges return to capacity by end of November as Kuwait strengthens security for oil sector

LONDON: Oil prices gained on Thursday, supported by supply risks as the market assesses the fallout from last weekend’s drone attacks on Saudi oil
infrastructure.

Brent crude futures gained $1.78 to $63.80 a barrel, while US West Texas Intermediate crude was up $1.28 at $58.40 a barrel.

The attacks knocked out around half of Saudi Arabia’s crude production and severely limited the country’s spare capacity, a cushion for oil markets in any unplanned outage.

“Global available spare capacity is extremely low at present following the weekend attacks, leaving little room for additional outages, which tends to be price supportive,” UBS oil analyst Giovanni Staunovo said.

Earlier this week Saudi Arabia set out a timeline for a resumption of full operations, saying it had restored supplies to customers at levels prior to the attacks by drawing from its oil inventories.

HIGHLIGHTS

• US to impose more sanctions on Iran.

• Cushing stocks at lowest since October, 2018.

• Global excess capacity at low level.

The Kingdom said it would restore its lost production by the end of this month, and bring its output capacity back to 12 million barrels per day by the end of November.

“These plans suggest Saudi Arabia will have no spare capacity for at least the next two and a half months,” consultancy Energy Aspects said.

Saudi Arabia, the world’s leading oil exporter, has said the crippling attack on its oil sites was “unquestionably sponsored” by Iran.

US President Donald Trump said there were many options short of war with Iran and added that he had ordered the US Treasury to “substantially increase sanctions” on Tehran. Iran has denied involvement in the strikes.

Iran warned President Trump against being dragged into all-out war in the Middle East.

US Secretary of State Mike Pompeo has described the weekend strike as an act of war and has been discussing possible retaliation with Saudi Arabia and other Gulf allies.

Kuwait’s oil sector has raised its security to the highest level as a precaution, a Kuwaiti official said.

Separately, weekly data from the Energy Information Administration on US oil inventories provided a mixed snapshot.

Stockpiles of crude in the US the world’s largest oil producer, rose by 1.1 million barrels last week against analysts’ expectations for a drop of 2.5 million barrels.

However, stocks at Cushing, Oklahoma, the delivery point for benchmark futures, fell to their lowest since October 2018.