China will cut import tariffs on goods including machinery, paper, textiles and construction materials from Nov. 1, in a move that would lower costs for consumers and companies as a trade war with the U.S. deepens.
The decision will lower tariffs for 1,585 products, cutting the tax burden on consumers and companies by about 60 billion yuan ($8.7 billion), state radio reported, citing a meeting of the State Council. This will lower the average most-favored nation tariff rate to 7.5 percent from 9.8 percent.
The Chinese government has yet to detail how the general tariff cut will apply to U.S. goods affected by retaliatory tariffs in the trade war.
In theory the same goods can receive a lower basic tariff and still have extra duties piled on by the response to Trump’s measures. Whether goods affected by the trade war receive this treatment will depend on precisely which items the government selects to cut duties on. The Chinese government hasn’t released that list of the specific goods yet.
The average import tax for some machinery will be reduced to 8.8 percent from 12.2 percent, for textiles and construction materials to 8.4 percent from 11.5 percent, and for paper and some other products to 5.4 percent from 6.6 percent, the radio station reported.
The decision follows on from similar moves which were aimed at reducing prices of imports to stimulate consumption and is in line with China’s pledge to boost imports. It’s not clear how this change will affect specific imports from the U.S. Any reduction of tariffs usually must be offered to all countries equally under World Trade Organization rules, but U.S. goods would still be subject to China’s retaliatory tariffs.
China still has a higher average tariff rate than many developed economies. The U.S.’ average applied MFN rate was 3.4 percent in 2017, and in general the Trump administration has accused China of being a protectionist economy.
