AHEC attended a briefing with USDA Undersecretary for Trade Ted McKinney on the significance of the “Phase 1” trade deal with China on agricultural products. As mentioned in last week’s AHEC Trade Alert, the deal does not contain any references to the reduction of current Chinese retaliatory tariffs on US goods, but rather contains a commitment by China to increase purchases of US products—including hardwood products—by an additional $200 billion over the next two years. China is expected to accomplish this through a combination of targeted tariff exclusions, a reduction of technical barriers to trade, government purchases and Chinese government “encouragement” for the private sector to source US goods.
According to the USDA, as part of this agreement China will be re-opening its “Tariff Exclusion Process” and will begin to review applications for specific product exclusions in the near future. Attached to this email is a report produced by the US Embassy in Beijing last summer outlining the original application procedures. We understand that several Chinese companies did apply in the first round last June but to our knowledge none were approved. The US embassy believes that in light of the Phase 1 commitments the Chinese government may look more favorably on applications this time around.