China exempts 16 types of United States goods from additional tariffs

Donna Grethen  Op-Art

Donna Grethen Op-Art

"Chinese tariffs that really matter are the ones on USA agricultural and manufacturing goods, produced mainly in states with strong support for [President] Donald Trump", Artur Baluszynski, head of research at Henderson Rowe, told CNN Business. S&P 500 (SPX) futures were up 0.5% while Nasdaq (COMP)futures increased 0.7%.

China said on Wednesday that it would exempt some USA imports from tariffs as Beijing and Washington prepare to restart trade talks next month - but will keep the penalties on farm-friendly goods soybeans, corn and pork.

Trump has offered billions in aid to farms badly damaged in the trade war.

The US and China have engaged in a tit-for-tat tariff war affecting billions of dollars in goods.

But US businesses in China are increasingly pessimistic about their prospects, with a report released Wednesday saying growing numbers of companies expect their revenues and investment in the local market to shrink.

Gao said working-level teams from both countries would meet soon to prepare for the next round of top-level talks between Chinese Vice Premier Liu He, and U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin.

The negotiations in early October would be the first since talks broke down in May.

Both China and the US have seen signs that the trade conflict between the two countries is taking an economic toll.

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

In July, the United States exempted 110 Chinese-made products from tariffs.

"These adjustments signal that China is more willing to make progress in the October trade talks, likely toward striking a "narrow" agreement that involves China buying more United States goods in exchange for the USA suspending further tariff hikes", Barclays analysts said in a research note.

Beijing and Washington were close to a deal last spring but USA officials said China backed away from an agreed text over a reluctance to change laws to address US complaints.

Trump has long accused China of intellectual property theft and manipulating its currency to make its goods cheaper than American products on the world market.

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