UNITED STATES (OBSERVATORY NEWS) — China said on Thursday it cut half the additional tariffs imposed on 1717 US goods last year, after signing a phase 1 deal that laid a truce in the fierce trade war between the world’s two largest economies.
While the announcement comes in response to a US compliance with the agreement, analysts also see it as a move by Beijing to increase confidence in light of a virus outbreak that disrupts business and harms investor sentiment.
The Chinese Ministry of Finance said in a statement that as of 0501 GMT on February 14th, additional fees imposed on some goods will be reduced to five percent from ten percent and others will be reduced from five percent to 2.5 percent.
The ministry did not mention the value of the goods included in the decision, but the goods that benefit from the new base are part of goods worth 75 billion dollars. China announced last year that it would impose five percent duties on it, which came into effect on September 1.
On Thursday, US Treasury Secretary Stephen Mnuchin said he expected China to honor its commitment to increase purchases of US goods and services by at least $ 200 billion over the next two years, despite the outbreak of the coronavirus that has killed hundreds and harmed the Chinese economy.
China has pledged to purchase American goods under the Phase 1 trade agreement with the United States.
“Based on the current information, I do not expect any problems they will have in fulfilling their pledges,” Manuchin said in an interview with Fox Business.
In a separate statement, the Chinese Finance Ministry said the fee reduction corresponds to a US announcement of Chinese goods, which is also scheduled for February 14.
The ministry said that any other amendments will depend on the developments of the economic and commercial situation between the two countries.
While fee reductions indicate clear progress in Sino-US trade relations, the outbreak raises doubts about the timeframe in which the Stage 1 deal can support China’s slowing economy.
On Thursday, quoting a Chinese trade expert close to the government, which was not named, Chinese Global Times reported that Beijing is considering using a disaster-related paragraph in the Phase 1 agreement because of a coronary virus outbreak.
The text of the stage 1 agreement includes a disaster paragraph that allows delays in the event of a “natural disaster or other unexpected event”.
This article is written and prepared by our foreign editors writing for OBSERVATORY NEWS from different countries around the world – material edited and published by OBSERVATORY staff in our newsroom.
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