China cuts tariffs in half on $75 billion of U.S. imports
China cut tariffs in half on $75 billion of U.S. imports including soybeans, pork and auto parts Thursday in a trade truce with Washington while Beijing struggles with a costly virus outbreak.
The tax rate on some 916 items including soybeans, pork and fish was cut from 10% to 5%, effective Feb. 14, the ministry said. The rate for 801 items including auto parts will be cut from 5% to 2.5%.
The cuts follow last month's signing of a "Phase 1" agreement toward ending a long-running tariff war over Beijing's technology ambitions and trade surplus. Both sides have made conciliatory gestures but the lingering dispute threatens to chill global economic growth.
The reductions follow American tariff cuts last month on Chinese goods. There was no indication Beijing altered its own cuts in response to the rising cost of efforts to contain a virus outbreak that have depressed business activity by closing factories, restaurants and shops. U.S. stocks rose in pre-market trading on Thursday morning.
"Markets continue to look through risks from the coronavirus, with sentiment improving on China's plans for tariff cuts on American imports, in line with the interim trade deal," TD Securities analysts told investors in a note, according to CBS MoneyWatch.
Washington hiked tariffs on Chinese goods in 2018 in response to Beijing's multibillion-dollar trade surplus and complaints it steals or pressures companies to hand over technology. China retaliated by increasing duties on American goods.
Under the "Phase 1" deal in October, Washington canceled planned additional tariff hikes and Beijing committed to buy more U.S. farm exports.
"The next steps depend on the development of the Chinese-U.S. economic and trade situation," said a Ministry of Finance statement. "We hope to work with the United States toward the final elimination of all tariff increases."
However, most tariff hikes imposed previously by both sides on billions of dollars of each other's good are still in place.