On March 23, local time, the Office of the U.S. Trade Representative said it would reinstate tariff exemptions for some Chinese imports. The tariff exemption covers 352 of the 549 previously pending products. It will apply to goods imported from China between October 12, 2021 and December 31, 2022. The international situation has changed again, so what are the benefits of this U.S. policy for our economic development? Here are some of my views to share.
First of all, why the U.S. will resume tariff exemptions for China, there are the following two reasons.
The U.S. is currently facing the strongest inflation in 40 years, the U.S. Consumer Price Index in February, the latest release of up to 7.9%, and with the deterioration of the situation in Russia and Ukraine, the probability that the CPI data in March will be even higher than February, the future of a long period of time, the U.S. inflation situation is difficult to ease.
Because Chinese goods are so competitive, with some low- and mid-range manufactured goods already accounting for as much as 70-80 percent of the world's share, that the U.S. can't find substitutes around China.
The following is the concern about the impact that this US policy can have on the Chinese economy, and I personally feel that because the international relations factor is not very stable, the actual benefits seen are not that many.
Helps normal trade in related products
What products are involved in the 352 exemptions? Guotai Junan (15.56 +0.97%, diagnosis) securities research report pointed out that the main including motors, pumps and other electrical equipment, filters, water purifiers and other mechanical equipment, furniture, bicycles, textiles and other consumer goods, some plastic products, some auto parts, steel and other base metal products, X-ray hardware and other medical equipment, etc., some chemicals and so on. Measured by the 2-digit HS code, the exemption amount of Chapter 85 motors, electrical and audio equipment, Chapter 84 boilers, mechanical appliances and parts, Chapter 39 plastics and products thereof, and Chapter 94 furniture, lamps and bedding accounted for about 75% of the total exemption amount this time. Exemption ratio, some textile fibers, plastic products, leather products, furniture and lamps, detergents and lubricants, such as the exemption amount accounted for more than 15% of China's exports to the United States. Then, the above kinds of products of normal trade resumption, are able to drive the development of exports, but also enough to stimulate the production of raw materials.
2. Positive impact on the export business of the relevant companies
Can drive the sales of 352 export products, is also an opportunity, although the time is relatively less, but also to a certain extent to bring profits.
3. May reduce costs
This time the United States of America on imports from China to resume the list of tariff exemptions involving the company's products less, mainly vacuum cleaners, air purifiers and so on. The company's exports to the U.S. products using the FOB transaction mode, the buyer's own customs clearance and payment of tariffs, the above policy on the company's performance of the direct impact is relatively small, but will reduce the cost pressure on customers, to promote consumer demand, and favorable to the whole industry chain of export-related industries.
4. It can alleviate the problem of overcapacity faced by China's lack of consumption to a certain extent.
The U.S. lack of goods facing internal hyperinflation, China's own overcapacity, so that in the U.S. has not found a cheaper cheap capacity suppliers, China is still able to obtain some profits.