Holding on to its end of the deal with the United States, China revealed on Thursday that it will proceed with its plan to reduce tariffs on $75 billion worth of US-made imports. The country's push to ease tensions with the United States comes at it continues to battle the coronavirus epidemic that is currently wreaking havoc on its economy.
The move is part of a trade truce under Trump's administration, which will also require China to buy around $200 billion worth of goods from the US over the next two years. Some critics have pointed out that the truce may not last very long if China will not manage to keep its end of the bargain.
Two of the world's largest economies backed down from the increasingly punishing trade war last month. Both governments had reached an interim trade pact that effectively halted the imposition of additional tariffs against each other's products.
The phase one deal was hailed as a temporary measure that froze hostile trade actions and was never considered to be an end to the dispute. However, both countries have vowed to continue trade talks in hopes of building the foundation for an eventual bilateral agreement.
The US was the first to extend its hand by effectively reducing tariffs on more than $120 billion worth of Chinese-made goods. China's announcement of Thursday was its way of reciprocating. The country's Ministry of Finance explained on Thursday that it would be cutting the tariffs it placed on US imports in September by half. China's imposed tariffs, which included US cars, soybeans, and crude oil, will be officially cut in half on Valentine's Day, February 14.
Ministry officials added that they hope to eventually eliminate all tariffs imposed by the county and for the US to one day does the same. Despite the easing of tensions, all other tariffs and increases are still in place, particularly the levies placed by United States President Donald Trump on more than $360 billion worth of Chinese-made goods back in 2018.
Economists have pointed out that the US may very well make the next big step to end the dispute, but only if China managed to keep its end of the bargain and purchase $200 billion worth of US-made goods; a promise it made last month. Keeping that promise may be more difficult than it sounds given that China is currently facing a massive crisis.
The recent spread of a novel coronavirus strain has forced the country to lock down several cities in an attempt to control the spread. Fears of infection and of the virus spreading have caused widespread losses within the country, affecting mostly businesses in the travel and tourism industries.
