China
announced another round of tariff cuts, lowering import taxes on more than
700 goods from Jan. 1 as part of its efforts to open up the economy and
lower costs for domestic consumers.
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There will
also be cuts to some export tariffs, and temporary import tariff rates
will be as low as zero for some goods, the Ministry of Finance said in a statement on Monday.
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The
‘temporary’ rates can be changed ad hoc and can be lower than the
current Most-Favored Nations standard though they are also available to
all World Trade Organization members.
Key Insights
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This is the
third round of tariff cuts announced this year, as China looks to cut
costs for consumers and implement President Xi Jinping’s promises to
open up further.
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U.S. exports
will get the benefit of the reductions as well, although most products
will still be subject to the retaliatory tariffs until there is a
breakthrough in the ongoing talks.
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With tariffs
on U.S. soybeans stopping a key source of edible meal (often used for
animal feed), China will implement zero tariffs on imports of a variety of
meals including sunflower and canola.
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Some materials
for pharmaceutical manufacturing will also be subject to zero tariffs, and
taxes on high-tech imports will be set "relatively low,"
including at 1 percent for a type of generator for aircraft, and 5 percent
for a type of welding robots used in car assembly lines.
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The ministry
said MFN tariffs will be further cut for a wide-range of information
technology imports starting from July 1, 2019, including for medical
diagnosis machines, speakers and printers, according to a separate table on its website.
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The nation
will also scrap export tariffs on 94 items of products starting from the
new year, including fertilizers, iron ore, coal tar, and wood pulp. Export
tariffs on these goods are as high as 40 percentcurrently.
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Imports from
nations that have reached a trade pact with China will be levied at the
rates agreed by both sides. China’s bilateral deals with New Zealand,
Peru, Costa Rica, Switzerland, Iceland, South Korea, Australia, Georgia
already included promises to further lower tariffs in 2019, as does the Asia-Pacific
Trade Agreement.
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Imports from
Hong Kong, Macau will also enjoy lower taxes.
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