China cuts tariffs soon. Amid a slowing economy and the ongoing trade war with the U.S., China is planning to lower tariffs on certain products. The country’s tariff cut will account for $358 billion on over 859 different product lines ranging from produce to big machinery. This comes a week after the U.S. and China agreed to a “phase one” trade deal to avert a new round of tariffs and reach a partial agreement to end the trade war.
Although they are cutting import tariffs, they won’t disappear completely. China plans on implementing temporary import tariffs on 850 products in 2020 instead of their usual most-favored-nation tariffs. However, this is still a win for U.S. manufacturers because these tariffs are significantly lower than the most-favored-nation tariffs.
The Chinese ministry of finance said the tariff cuts are being made to “increase imports of products facing a relative domestic shortage, or foreign specialty goods for everyday consumption”.
Goods to majorly benefit from the tariff cut on January 1st include frozen pork, tech parts, medication and avocados. After an outbreak of African swine fever in August that nearly cut China’s pig herd in half, their pork prices are at record highs. While China is trying to meet domestic demand for pork, they are lowering tariffs on frozen pork to 8% from the most-favored-nation duty of 12%. The tariff rate for frozen avocado will be cut to 7% from the most-favored-nation rate of 30%. Tariffs for some asthma and diabetes medications will be set to zero, as well as tariffs on multi-component semi-conductors.
While this greatly benefits the United States economy, China’s other trade partners, including New Zealand, Peru, Singapore, and Pakistan, will enjoy the lower tariffs as well. China cuts tariffs across the board.
Senior Advisor Curtis Ellis of America First Policies says, “America was built on tariffs, China built its economy on huge tariffs, Japan has huge tariff barriers, we have the lowest tariffs in the world and it’s only when we put tariffs on China did they come to the table and play ball.”
The heavy investments that China is making in future technologies was brought up in the clip below in which Ellis replied, “In addition to the tarriffs, we have policies in place to bring back some of this high-tech investment in China and to stop the Chinese from stealing with cyber esponisage.”