China is countering Trump's tariff war by encouraging more imports to boost economic production in its economy. It said it will slash imports on nearly 1,600 products starting Nov. 1.
Analysts said this is a smart move intended to open up China's economy and increase spending while easing trade tensions with the United States. U.S. steel products are included in the tariff cuts. It must be remembered that the main reason why Donald Trump launched his trade war against the entire world was to protect the U.S. steel industry.
China will slash import tariffs on metals and textile products, including steel products, to 8.4 percent from 11.5 percent. It will also reduce tariffs on wood and paper products. Tariffs on minerals and gemstones will be cut to 5.4 percent from 6.6 percent, while tariffs on machinery and electrical equipment will also be lowered.
China's Ministry of Finance said average import tariffs on nearly 1,600 products -- or 19 percent of all taxable items -- will be lowered to 7.8 percent from 10.5 percent. The cuts due on Nov. 1 will lower China's overall tariff level to 7.5 percent in 2018 from 9.8 percent in 2017.
In a statement, the ministry said reducing tariffs is conducive to promoting the balanced development of foreign trade and promoting a higher level of opening up to the outside world.
This is China's third tariff cut this year. In May, China made the majority of imported medicines tariff-free. In July, China reduced import tariffs on a broad number of consumer items including cars, cosmetics, apparel, home appliances, and fitness products.
In December 2017, China cut tariffs on almost 200 consumer products to 7.7 percent on average from 17.3 percent. The affected imports included food, health supplements, pharmaceuticals, garments, and recreational goods.
The Nov. 1 tariff cuts are divided into four parts, said the ministry. The first covers 677 products and will see tariffs lowered to 8.4 percent from 11.5 percent. These products are steel, textiles, building materials, and base metal products. Building materials consist of aluminum doors, windows, and related frames.
The second part covers 386 products that will see tariffs cut to 8.8 percent from 12.2 percent. Included are mechanical and electrical equipment. The third will see tariffs slashed to 5.4 percent from 6.6 percent. Covered are some 390 products, including wood and paper products, minerals and gemstones,
The fourth encompasses 122 products associated with trade facilitation. Tariffs here will be cut to 8.5 percent from 12.3 percent.
Combined with the two previous tariff reductions, China's overall tariff level will fall to 7.5 percent in 2018 from 9.8 percent in 2017.
