China to halve tariffs on some US imports
Cuts are part of US-China trade deal but timing is seen as a way of reducing the impact of the coronavirus on the Chinese economy
China is set to cut tariffs on a wide range of goods it imports from the US as it battles to shore up its economy in the face of the coronavirus outbreak.
The amounts charged on 1,717 items will be reduced, said Chinese officials. Current tariffs of 10 per cent and five per cent will be halved.
The cuts are part of the Phase One agreement of a trade deal struck last month between the US and China after a damaging period of stand-offs and hostile rhetoric. These cuts are reciprocal to US tariff cuts on Chinese imports.
However, it’s the timing that is of interest. Analysts are suggesting this latest cut is partly to boost confidence in China – settling businesses and reassuring investors – as it battles to contain the economic fallout from the coronavirus. Factories across the country remain closed and its manufacturing sector faces a severe drop in production.
The US-China trade agreement includes a disaster-related clause that allows China to avoid repercussions even if it cannot meet the targeted purchases of US goods and services. This move is seen as an indication that China is fully committed to the deal.
The reductions cover $75bn (£58bn, €68bn) of US goods coming into China and will take effect on 14 February, the same day as the US tariff cuts. Tariffs are still in place on a further $35bn worth of US goods. China's finance ministry said the aim was ''to promote the healthy and stable development of Sino-US economic and trade relations''.
Stock markets in the Far East rallied on the news. The Hang Seng was up more than 2.5 per cent, the Nikkei up just under 2.4 per cent and Shanghai up a tad over 1.7 per cent at 9.30am GMT.
FURTHER READING: Foreign direct investment in China rises
FURTHER READING: Chinese manufacturing expands despite coronavirus