Chinese exclusion process is aimed at limiting domestic damage caused by higher tariffs on US imports

China has, for the first time, used a process that would exclude some US imports from higher tariffs to spare consumers and producers at home the worst of the punitive measures while leaving room for negotiations between the two countries.

The process, six months in the making, was modelled on one used by the US before tariffs were imposed, with one major difference – there are no public hearings involved in the Chinese process.

A three-page preliminary regulation document was released on Monday together with a long list of American products that would be subject to higher tariffs, part of China’s response to the US tariff increase on Friday.

Companies in China that would be affected can apply for an exclusion from the higher tariffs on American imports, with industry associations and chambers of commerce encouraged to file on behalf of their members, the document from the Customs Tariff Commission of the State Council said.

Applicants must explain the difficulties they would suffer in substituting products for American goods, the economic damage the tariffs could cause their businesses and the damage to their industrial development and employment, supported by facts and figures.

The tariff commission will check and review each application, then take expert, industry and government opinion before deciding on the merits of each application. The document did not say how long the review would take or when a final exclusion list would be released.

Huo Jianguo, former head of the research institute under the Ministry of Commerce, said the tiered tariff increase already reflected government priorities in limiting the damage to domestic industries from higher tariffs on US imports. “It’s a common practice internationally to exclude products vital for people’s livelihoods and the country’s economic development,” he said.