The US decision to reinstate certain "Section 301" tariff exclusions for Chinese product categories sends a positive signal for benign interactions in bilateral economic and trade relations, which will help stabilize expectations for global supply and industrial chains, experts said on Monday.
They said reinstating tariff exclusions on Chinese goods will help the US deal with rising inflationary pressure, reduce costs within global supply chains and benefit enterprises and consumers from both sides.
Wang Peng, a researcher at Huazhong University of Science and Technology's Institute for State Governance, said the US administration's attempts to decouple the two economies harm US consumers and enterprises, and US importers and consumers have absorbed most of the additional costs resulting from the additional tariffs on Chinese products.
Wang said the exemptions suggest that the US recognizes that the two nations have strong economic complementarity, and the decision will help create favorable conditions to expand bilateral trade and economic cooperation. "It will be good for the global economy."
Noting that the list includes consumer goods and industrial products, Xu Hongcai, deputy director of the China Association of Policy Science's economic policy committee, said the move will help the US alleviate high inflationary pressure.
Although the 352 newly announced categories only account for around one-seventh of the over 2,200 exclusions previously granted by the Trump administration, the reinstated exemptions are great news for Chinese industries, Xu said.
Citing the USTR statement, Luo Zhiheng, chief economist at Yuekai Securities, said the US move aims to meet its domestic production and consumption needs as well as cushion the economy.
Luo said US trade frictions with China not only harm the interests of US companies and consumers but also disrupt industrial and supply chains worldwide.
"The global economy is facing multiple pressures from COVID-19, high inflationary pressures and geopolitical tensions," Luo said. "The exemptions will help ease the risk of escalation of trade frictions and stabilize global industrial chains."
He said the list covers over $60 billion worth of Chinese products, which accounted for about 12 percent of China's total exports to the US in 2021. "It will support China's exports in 2022, and it will also benefit Chinese manufacturing sectors in fields including mechanical equipment, home appliances and furniture.
"For the US side, the exemptions will help lower prices of imported goods and thus ease inflationary pressure. As the list includes urgently needed parts and anti-pandemic materials, that will also help ensure the security of US supply chains," Luo said.
Wang Meiting, a researcher with the Bank of China Research Institute, said it is not easy for the US to find substitutes in a short time and thus the possibility of a further increase in tariff exclusions on Chinese goods cannot be ruled out.
Wang said the exemptions demonstrate China's key role in stabilizing global supply and industrial chains. "The reinstated exemptions are sending a positive signal to bilateral trade and even global trade. It showcases that the US prioritizes stabilizing the economy instead of containing China's development."
Considering that the exemptions are part of a larger US drive to dampen inflationary pressure, Wang expects to see more steps to bring bilateral economic trade ties back to normal.