Description: Unofficial reports have indicated that Chinese companies have cut down tariffs to several target – specific US products to zero, following positive statements from Washington in the previous week. The raging trade war that shook up global trade markets started with US President Donald Trump blanket tariffs on almost every country in the world. China has been revealed to have been the specific target of the US tariffs as both countries threatened the world by their actions with high levels of inflation and recession. Several Chinese companies have reported that US products such as semiconductors, memory chips and various pharmaceutical products from unspecified companies have been exempted from the 125% levies imposed by China on US goods. The exemption from tariffs comes as US President Trump announced the US tariffs on China to be reduced in upcoming weeks.
Impact: China’s exemption of tariffs on key US goods could be perceived by various geopolitical prisms, as both countries are engaged in a trade war with extremely high stakes. China could be extending an olive branch, indirectly admitting to codependence with the US economy on the global market or it could also be repositioning and buying time through the exemption, until key strategic geoeconomic alliances are concluded. Trump and his administration have repeatedly stated over the past week that the US is directly engaged in trade talks with China, which the latter categorically denounced indicating that there could be potential backchannel negotiations which have resulted in the current exemption. Trump’s tariff war has so far prompted various reconfigurations of global strategic alliances, as China has moved towards loosening regulation and state influence in foreign investor companies from Europe while concluding key strategic alliances in South Asia. The US is unlikely to reciprocally respond to China’s tariff exemptions in the short term as Trump has heavily backed his tariff policy on bringing the so-called trade surplus with China on an even keel.