“By further cutting import taxes, China is sending a message that it will keep opening up and reform no matter how the trade war goes.”
As we’ve pointed out in the past, one of China’s biggest disadvantages in the burgeoning trade war with the US is its yawning trade surplus, which constrains its ability to impose retaliatory tariffs on US goods (which explains China’s latest tariff threat). With this in mind, China’s leaders are being forced to find alternative ways to strike back at the US that, while not directly targeting imports, can be just as damaging. And one dauy after China’s Premier promised once again to “never” (or rather, never again) devalue the Yuan, Bloomberg reported Thursday that China is planning to lower imports on goods from other countries, thereby making US goods less competitive in the domestic Chinese market. The import cuts will reportedly take effect in October.
The decision effectively kills two birds with one stone: It disadvantages US producers and allows China to boast about its progress in liberalizing its markets.
China is planning to cut the average tariff rates on imports from the majority of its trading partners as soon as next month, two people familiar with the matter said, in a move that will lower costs for consumers as a trade war with the U. S. deepens.
Premier Li Keqiang said Wednesday that China would further reduce the tariffs, without elaborating. The two people who spoke on the new reduction asked not to be named as the matter isn’t public yet.
By cutting duties on goods even as it retaliates against President Donald Trump’s trade war with higher charges on some U. S. goods, China is following through on long-stated goals to boost imports. The move comes as the nation is trying to stimulate domestic consumption to support a slowing economy, and follows similar cuts to tariffs in July on a wide range of consumer goods.
