Chinese electronics exempted from US tariffs
On Friday, the Trump administration exempted a range of products – including smartphones, computers, and semiconductors – from his “Liberation Day” tariffs.
That’s a big carveout: Products exempt from tariffs account for ~22% of China's total exports to the US (ICWise).
But the Ministry of Commerce (MofCom) is still pissed:
- “This is a small step by the US toward correcting its unilateral and misguided practice of reciprocal tariffs.”
- “We urge the US…to take a much larger step in correcting its course by completely abandoning the erroneous practice of 'reciprocal tariffs'.”
Just to be clear: The US later clarified the 20% fentanyl-related tariffs introduced in February and March still apply to the exempted products.
And many of the exempted products are likely to get further tariffed in the months ahead (Reuters):
- On Sunday, Trump indicated that the US is looking to impose separate tariffs on all (i.e. not just from China) imports of electronics, as well as semiconductors and pharmaceuticals.
Our take: The chopping and changing of US tariff policy makes it impossible for Beijing to engage in serious talks – whether formal or informal – with US counterparts on what sort of trade deal they are looking for, if any.
- That reduces the likelihood of a Xi-Trump meeting taking place any time soon – a prerequisite for ending the trade war.