General

According to the Huacheng Import and Export Data Observation Report, the Trump government of the United States hopes to reduce the US trade deficit with China by imposing more punitive tariffs on China in 2018, but the trade war has not reduced the US trade deficit so far, instead, it has made American companies and consumers increase spending. The original tariffs on Chinese goods will expire on July 6 and August 23 this year.

The timeline of the major events of the United States imposing tariffs on China, and the calls for the United States to cancel the imposition of tariffs continue

Pushing up inflation and intensifying the risk of economic recession, the US inflation rate hit a new high in the past 40 years. In May, the CPI rose 8.6% year-on-year. President Biden of the United States is eager to take various measures to quell the serious domestic inflation, and the elimination of tariffs imposed on China has become an important option. In this regard, the United States has continued to discuss the abolition of tariffs on China.

According to the Huacheng Import and Export Data Observation, several western media quoted sources on July 5 that the Biden government will "reshape" the former government's tariff policy towards China, and its decision may include three parts:

1. Abolish the tariffs imposed on 10 billion US dollars of China's goods exported to the United States, which are currently about 370 billion US dollars;

2. Launch a new tariff exclusion procedure against China;

3. At the same time, a new tariff investigation was launched on some Chinese industries in accordance with Article 301 of the US Trade Law.

Which industries will benefit from the abolition of additional tariffs?

According to the Huacheng Import and Export Data Observation Report, some analysts believe that, given that the main purpose of the United States to eliminate tariffs on China is to curb domestic inflation, consumer goods that are directly related to people's lives may become the preferred target, such as toys, plastic products, household appliances, automobiles and other industries.

According to the accounting results of the global input-output import and export database, the industries that can drive the largest profits in the United States may be the preferred targets. For example, 14% - 16% of the annual output value of furniture manufacturing and computer, electronic and optical product manufacturing are driven by American demand. Next are China's air transport, textile, rubber and plastic products, electrical equipment, chemical industry, paper products, metal products and special machinery and equipment industries. 5% - 10% of the annual output value of these industries is driven by American demand.

To sum up, there are many industries that can discuss the elimination of additional tariffs. The elimination of additional tariffs can reduce the export burden, which will benefit industries and enterprises that export more from the United States, with a wide coverage. Of course, it is also possible that the final policy will be thunder and small rain, which may be of limited benefit to China's exports, Huacheng Import and Export Data Observation reported.