Chinese Gov’t Reduces Import Tariffs, Lowering Consumer’s Cost / Targeting New Sources

As China is preparing to face an escalating trade war with the U.S., it has unveiled plans to cut tariffs for products including machinery, electrical equipment and textile, which will be effective on Nov. 1.

The cuts on 1,585 industrial products are expected to lower costs for consumers and companies by about 60 billion yuan ($11.9 billion), this year.

The plan will lower the average tariff to 7.5% from 9.8%, still, China has a higher average tariff rate than many developed economies.

 

Average tariffs for machinery and electrical equipment, which are one of China’s biggest imports by value, will be reduced by almost a third to 8.8% from 12.2%. China imported over $632 billion worth of machinery and electrical equipment in the first eight months of the year, up 19.6% year-on-year.

Tariffs on textile products and construction materials will drop to 8.4% from 11.5%, while the tariff on paper products will be lowered to 5.4% from 6.6%.

 

However, after all this, the Chinese government has yet to detail how the general tariff cut will apply to US goods affected by retaliatory tariffs in the trade war. Will this plan attract new suppliers to trade with China, and will it able to compensate for the loss from the trade war with the USA?