China Cuts Tariffs on $75 Billion of U.S. Products it Already Promised to Import

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China cut tariffs on $75 billion of products that it promised to buy from the U.S., a move that will reduce the cost to Chinese importers but likely have very little effect on U.S. producers

The products that will see smaller tariffs include soybeans, pork and auto parts. The cuts follow last month’s signing of a “Phase 1” agreement toward ending a long-running tariff war over Beijing’s technology ambitions and trade surplus. Both sides have made conciliatory gestures but the lingering dispute threatens to chill global economic growth.

Since China had already promised to purchase hundreds of billions of U.S. products, the level of tariffs will not have much impact on U.S. producers. Rather, the move will reduce the costs of Chinese importers and reduce tariff revenue for the U.S. government. It can be seen as a tax cut for Chinese businesses.

There is also a symbolism in the cut, reaffirming China’s intent to meet its Phase 1 commitments.

The reductions follow American tariff cuts last month on Chinese goods. There was no indication Beijing altered its own cuts in response to the rising cost of efforts to contain a virus outbreak that have depressed business activity by closing factories, restaurants and shops.

“The next steps depend on the development of the Chinese-U.S. economic and trade situation,” said a Ministry of Finance statement. “We hope to work with the United States toward the final elimination of all tariff increases.”

The tax rate on some 916 items including soybeans, pork and fish was cut from 10% to 5%, effective Feb. 14, the ministry said. The rate for 801 items including auto parts will be cut from 5% to 2.5%.

Washington hiked tariffs on Chinese goods in 2018 in response to Beijing’s multibillion-dollar trade surplus and complaints it steals or pressures companies to hand over technology. China retaliated by increasing duties on American goods.

Under the “Phase 1” deal in October, Washington canceled planned additional tariff hikes and Beijing committed to buy more U.S. farm exports.

However, most tariff hikes imposed previously by both sides on billions of dollars of each other’s good are still in place.

–The Associated Press contributed to this report.

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