A container ship at the port in Qingdao, in China’s eastern Shandong province.
STR | AFP | Getty Images
China on Thursday announced that it will halve tariffs on hundreds of U.S. goods worth about $75 billion.
Tariffs on some U.S. goods will be cut from 10% to 5%, and from 5% to 2.5% on others, according to a statement from China’s Ministry of Finance. The adjustments will take effect from 1:01 p.m on Feb. 14, it said, without specifying which time zone it was referring to.
The cuts apply to about $75 billion worth of imports from the U.S. that was slapped with tariffs on Sept. 1, 2019, according to a separate statement on the ministry’s website. It was not immediately clear which products are covered.
The statement on the Ministry of Finance website said the move was made in order to “advance the healthy and stable development of China-U.S. trade.” A separate article on the website noted the cut in tariffs was timed in conjunction with a U.S. decision in January to halve tariffs on Feb. 14 for $120 billion of Chinese goods from 15% to 7.5%.
China said that the next adjustment will depend on how Sino-U.S. trade ties evolve, adding it hopes to work with Washington to completely eliminate all tariff increases.
One analyst says this development could be a sign that China is ready to move on beyond the so-called phase one trade agreement.
“Who knows the exact motivations, I mean that’s quite plausible, that they’re under (economic) pressure. But I think the development is very welcome because you know, that language suggests that there is a bit of an olive branch here. And a bit of a desire to move forward beyond the phase one and possibly take on phase two,” said Kingsley Jones, chief investment officer at Jevons Global.
“I think that would be good … if we can get these tariff barriers lowered, and get a normalization of relations that also includes some negotiation about those other sticking points, you know the IP and so on. Then I think that’s very positive,” he said.
Separately, Beijing on Saturday also said it would suspend retaliatory tariffs on products from the United States that can be used to combat the coronavirus outbreak in China.
China and the U.S. have imposed tariffs on billions of dollars worth of each other’s goods in their trade battle. Both countries have, however, reached a so-called phase one trade agreement which they signed in January.
Under the agreement, the Trump administration scrapped tariffs initially set to take effect last December. It also agreed to cut duties on $120 billion in products to 7.5%.
Still, the White House has said it will leave tariffs on another $250 billion in Chinese products in place for now. On Wednesday, Treasury Secretary Steven Mnuchin said a second phase of the agreement that the U.S. hopes to strike could include more tariff relief.
This is breaking news. Please check back for updates.
— CNBC’s Abigail Ng and Jacob Pramuk contributed to this report.
