32 countries have cancelled the GSP treatment for China's trade. What will exporters face?

2021-12-01

Customs website on October 28, according to the announcement, from December 1, China will no longer be the members of the European Union, Britain, Canada, Turkey, Ukraine and Liechtenstein 32 countries such as the GSP certificate of origin issued by the goods, that means China and those 32 countries are cancelled each other trade preferential treatment,  These 32 countries no longer grant China trade status under the Generalized System of Preferences.  
To be specific, the elimination of GSP treatment will cause some exporters to lose tariff preferences, bringing some pressure, but the overall impact is limited.  
On the one hand, China's exports have long gone through the stage of relying on preferential tariffs to win the market, and now the achievements of Chinese products in the international market mainly depend on competitiveness.  
On the other hand, the abolition of the GSP treatment will have a limited impact on the export costs of Chinese enterprises. In addition to the relevant arrangements under the WTO mechanism, China has also signed different trade agreements with some of the countries and regions.  Moreover, the resilience of our export sector has been demonstrated again since the outbreak.  
As we all know, monetary easing in Europe and the United States has caused a surge in commodity prices and energy prices, putting huge cost pressure on exporters. In addition, the United States has continued the main tone of trade protectionism against China under the Trump administration, and individual EU countries have occasionally made "difficulties" with ideological issues.  In such an environment, China's exports have maintained a much faster growth than expected, growing 22.7 percent in the first three quarters of 2021 and 28.1 percent in September, surprising many "pessimistic" analysts who forecast China's economy.  This is due to China's effective prevention and control of the epidemic and its complete industrial system. It also relies on the silent efforts of many small and medium-sized export enterprises in China. Some enterprises even bear the losses caused by the rising prices of raw materials for export credit, which improves the credit content of Chinese manufacturing and wins stable international orders.  
In addition, through the in-depth investigation of the manufacturing base in the southeast coast, it is found that the export sector has long been rid of the dependence on labor-intensive industries, intelligent factories have been widely used, and have the ability to evolve to the high-end of the industrial chain.  Some foreign media interpreted the cancellation of China's "GSP" treatment by 32 countries as an extension of the trade war waged by the US Allies against China. This is obviously a misinterpretation.  
The result of the US trade war against China is already clear. Despite the 25% tariff, China's exports to the US have kept increasing and hit a record high.  Under pressure from high inflation, US Treasury Secretary Janet Yellen once again said she would consider lowering tariffs on China in a reciprocal way.  For the EU, the UK and other countries also facing severe inflation, it is not in their interests to directly or in a disguised way increase the prices of imported goods from China, nor will it change the law and general trend of bilateral economic and trade development.  
To be specific, the elimination of GSP treatment will cause some exporters to lose tariff preferences, bringing some pressure, but the overall impact is limited.  
On the one hand, China's exports have long gone through the stage of relying on preferential tariffs to win the market, and now the achievements of Chinese products in the international market mainly depend on competitiveness.  
On the other hand, the abolition of the GSP treatment will have a limited impact on the export costs of Chinese enterprises. In addition to the relevant arrangements under the WTO mechanism, China has also signed different trade agreements with some of the countries and regions.  Moreover, the resilience of our export sector has been demonstrated again since the outbreak.  
As we all know, monetary easing in Europe and the United States has caused a surge in commodity prices and energy prices, putting huge cost pressure on exporters. In addition, the United States has continued the main tone of trade protectionism against China under the Trump administration, and individual EU countries have occasionally made "difficulties" with ideological issues.  In such an environment, China's exports have maintained a much faster growth than expected, growing 22.7 percent in the first three quarters of 2021 and 28.1 percent in September, surprising many "pessimistic" analysts who forecast China's economy.  This is due to China's effective prevention and control of the epidemic and its complete industrial system. It also relies on the silent efforts of many small and medium-sized export enterprises in China. Some enterprises even bear the losses caused by the rising prices of raw materials for export credit, which improves the credit content of Chinese manufacturing and wins stable international orders.  
In addition, through the in-depth investigation of the manufacturing base in the southeast coast, it is found that the export sector has long been rid of the dependence on labor-intensive industries, intelligent factories have been widely used, and have the ability to evolve to the high-end of the industrial chain.  Some foreign media interpreted the cancellation of China's "GSP" treatment by 32 countries as an extension of the trade war waged by the US Allies against China. This is obviously a misinterpretation.  
The result of the US trade war against China is already clear. Despite the 25% tariff, China's exports to the US have kept increasing and hit a record high.  Under pressure from high inflation, US Treasury Secretary Janet Yellen once again said she would consider lowering tariffs on China in a reciprocal way.  For the EU, the UK and other countries also facing severe inflation, it is not in their interests to directly or in a disguised way increase the prices of imported goods from China, nor will it change the law and general trend of bilateral economic and trade development.