[Asia Economy New York=Special Correspondent Joselgina] As the Ukraine crisis prolongs, the Joe Biden administration in the United States has decided to exempt tariffs on certain Chinese-made products. This move aims to offer a "carrot" to dissuade China from providing military and economic support to Russia, while also alleviating the highest level of inflation in the U.S. in 40 years.
The U.S. Trade Representative (USTR) announced on the 23rd (local time) that out of 549 Chinese products subject to tariffs, 352 items will have tariff exemptions reinstated. The tariff relief covers Chinese seafood products, chemical products, textiles, electronic products and components, and consumer goods. USTR explained, "The exemption will be retroactive from imports on October 12 last year and will apply until the end of this year."
Previously, in 2018 under the Donald Trump administration, the U.S. imposed sweeping tariffs on over 2,200 Chinese products, triggering trade conflicts with China. Later, by the end of 2020, as trade relations between the two countries improved, tariff exemptions were granted for all but 549 products, and since October last year, the expansion of exempted items has been under review.
In particular, this recent measure amid the prolonged Ukraine crisis is analyzed as a strategic move to improve U.S.-China relations and thereby prevent China from supporting Russia. President Biden recently warned Chinese President Xi Jinping during a phone call that there would be serious consequences if China supported Russia's invasion of Ukraine, but received no clear response. For the Biden administration, this is a conciliatory step following explicit warnings.
Domestically, the intent is clear to reduce inflation in the U.S. by removing tariffs on Chinese products. This also aims to improve supply chain disruptions that worsened after COVID-19. With the midterm elections coming up in November, inflation and supply chain improvements are urgent economic challenges for the Biden administration. The U.S. Congress and business sectors have consistently requested expanding the range of tariff-exempt Chinese products.
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