Key points of the article
From the continuous easing of China US economic and trade relations to the introduction of a new round of exclusion list, China and the United States have imposed four rounds of tariffs on each other. Since March 2018, the United States has unilaterally initiated Sino US economic and trade frictions, and has imposed tariffs on Chinese exports to the United States four times in the past two years, and China has also imposed tariffs four times to counter it. The high tariffs cover nearly 70% of China’s exports to the United States and nearly 60% of US exports to China.
From 549 draft tariff exclusion lists to 352 final tariff exclusion lists: since the second quarter of 2021, China US economic and trade relations have continued to release easing signals and launched the procedures for the introduction of tariff exclusion lists. In October 2021, the office of the US Trade Representative (USTR) restarted the procedure for issuing the tariff exclusion list and prepared a draft tariff exclusion list containing 549 products. In March 2022, USTR issued the final version of the tariff exclusion list, including 352 Chinese products.
What are the advantages of the implementation of 352 tariff exclusion lists?
1) review of the four rounds of tariffs imposed on China
The tariff list has gradually expanded from equipment and instruments related to production and manufacturing to daily necessities. However, after four rounds of tariff increases, the import amount of motors, electrical equipment and mechanical equipment has always ranked among the top three on the list of tariff increases. If no exclusion list is issued, the imposition of tariffs may have a serious impact on motors, electrical equipment and mechanical equipment.
2) review of tariff exclusion list
Since the release of the exclusion list in December 2018, the United States tends to give priority to adding mechanical equipment, motors and electrical equipment, precision instruments and other manufacturing products to the exclusion list. Products with large import scale are often given priority in the exclusion list.
Comparing the 549 draft tariff exclusion list and the 352 final tariff exclusion list: 142 commodities that appeared in the draft tariff exclusion list were excluded from the final tariff exclusion list, but 20 new commodities that did not appear in the draft also appeared in the final tariff exclusion list. In the whole year of 2021 and January of 2022, the import amount of products corresponding to the draft exclusion list and the final list reached 88.229/64.878 billion yuan respectively.
3) the implementation of 352 tariff exclusion lists may be good prospects:
Main line 1: Based on the newly released tariff exclusion list, focus on the products with the largest import scale, and calculate the import amount of the whole year of 2021 and January 2022. The Shenwan industries corresponding to the top five categories of products include electronics, household appliances, electrical equipment, mechanical equipment, chemical industry, light industry manufacturing and automobile.
Main line 2: pay attention to the categories that did not appear in the list to be excluded but did not appear in the list to be excluded in the final version. If they are finally included in the list to be excluded, it may be better than expected.
Summarizing the opinions of industry researchers, it is suggested to pay attention to the subjects that may benefit from the implementation of the tariff exclusion list: Cocreation Grass Co Ltd(605099) , China Jushi Co.Ltd(600176) , Jiangsu Changhai Composite Materials Co.Ltd(300196) Bafang Electric(Suzhou) Co.Ltd(603489) Hangzhou Great Star Industrial Co.Ltd(002444) Zhejiang Cfmoto Power Co.Ltd(603129) Zhejiang Jiecang Linear Motion Technology Co.Ltd(603583) ； Fuyao Glass Industry Group Co.Ltd(600660) Jiangsu Pacific Precision Forging Co.Ltd(300258) Zhejiang Sanhua Intelligent Controls Co.Ltd(002050) ； Anker Innovations Technology Co.Ltd(300866) Bros Eastern Co.Ltd(601339) Huafu Fashion Co.Ltd(002042) Wingtech Technology Co.Ltd(600745) 。
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