China on Wednesday introduced a fresh round of tariff cuts on numerous import products, in a move perceived as a means to protect the Chinese consumers against the escalating trade war with the US.
China’s State Council announced broad details of the cuts late Wednesday, without saying whether they would apply to U.S. products. China has previously vowed to exclude from tariff reductions any nation engaged in a trade fight with it.
The latest cuts – to begin in November and covering 1,585 products, including machinery, textiles and construction materials – are in addition to reductions announced earlier this year and are expected to lower costs for companies and consumers by nearly 60 billion yuan ($12 billion).
China’s overall import tariffs have been cut to an average of 7.5 percent from 9.8 percent a year ago, according to the Cabinet statement.
The biggest cuts will apply to machinery, measuring equipment and other kinds of electromechanical devices, which are among China’s biggest imports. Tariffs on those products will average 8.8 per cent, down from 12.2 per cent last year, while duties on building materials and textiles will fall from 11.5 per cent to 8.4 per cent and those on paper and other resource products from 6.6 percent to 5.4 percent.
The announcement comes after the US President Donald Trump enforced a tariff increase on US$200 billion of Chinese goods on Monday. Beijing responded by imposing penalties on US$60 billion of American products. That was on top of an earlier duty increase by both sides on US$50 billion of each other’s goods.
Under the latest changes, tariffs on electronic equipment and other industrial products will be cut from 12.2 percent to 8.8 percent, according to a Cabinet statement. It said charges on textiles and building materials will fall from 11.5 percent to 8.4 percent and those on paper and other resource products from 6.6 percent to 5.4 percent.
In July, China halved import tariffs on 1,500 consumer products, ranging from apparel and cosmetics to home appliances.
The escalating trade war between US and China has been viewed by Australian industry experts as a worrying sign for the Australian companies.
The Australian Industry Group (Ai group) chief executive, Innes Willox, had earlier warned that the escalating trade war between the USA and China is hurting Australian companies through restrictions in availability of key components, higher landed costs for Australian exports out of China and the USA, damage to business confidence, and delayed investment decisions.
“The complexity of international supply chains means that the impact of either US or Chinese tariffs will be felt by all kinds of businesses and as expected Australia is becoming collateral damage. Trying to stay ahead of any changes will be a bit like playing whack-a-mole, but agile companies with good relationships with customers and suppliers are best placed to survive this trade conflict,” Willox said.