China announced yesterday that it will be slashing additional tariffs on $75 billion worth of U.S. imports imposed last year. The move is part of Beijing’s efforts to implement a recently signed “phase one” trade agreement with Washington.
Starting next week (February 14), China is set to cut tariffs on some U.S. goods to 5% from 10%, while duties on some other items will be reduced to 2.5% from 5%. Some of the specific cuts include the following:
- A drop from 5% to 2.5% for tariffs on U.S. crude oil.
- A rollback from 30% to 27.5% on soybean tariffs, which prior to the September increase had been at 25%.
- A cut on total tariffs on pork from 60% to 55%.
- A reduction from 35% to 30% on beef tariffs.
“China hopes both sides can follow what have been agreed in the deal and make efforts to implement relevant parts of the deal to boost market confidence, to promote bilateral relations, and to help world economic growth,” a statement China’s Ministry of Finance said.
The planned reductions parallel those announced last month by the Trump administration, which as of February 14 is set to lower tariffs on roughly $120 billion in Chinese goods — including electronics and apparel — to 7.5%, from 15% currently.
The Big Picture
While the size of the reductions shouldn’t be overstated — China’s tariff cut only applies to the increases made in September — it also follows up on an agreement to suspend the tariffs Beijing had intended to impose back in December.
Most significantly, the rollbacks of trade war tariffs are viewed by many experts as a hopeful sign of goodwill that might help set the stage for further negotiations and as another positive step on the path toward more normalized trade relations between the world’s two largest economies.