China’s finance ministry is cutting import tariffs on nearly 1,600 products starting Nov. 1, a move intended to open up its economy and increase spending while easing trade tensions with the U.S.
China will cut import tariffs on textile products and metals, including steel products, from 11.5% to 8.4%, and tariffs on wood and paper products, minerals and gemstones will be cut from 6.6% to 5.4%, the ministry said. Tariffs on machinery and electrical equipment will also be lowered.
Average import tariffs on nearly 1,600 products, about 19% of all taxable items, will be lowered from 10.5% to 7.8%, the ministry said, lowering China’s overall tariff level from 9.8% in 2017 to 7.5% in 2018 as a result, Reuters reported.
“Reducing tariffs is conducive to promoting the balanced development of foreign trade and promoting a higher level of opening up to the outside world,” the finance ministry said.
While China has threatened retaliatory tariffs on U.S. products, its finance ministry has also cut tariffs twice this year. Starting in May, China made a majority of imported medicines tariff-free. And in July, China reduced import tariffs on a range of consumer items including cars, apparel, cosmetics, home appliances, and fitness products.
A new JPMorgan study is assuming the U.S. will levy 25% tariffs on Chinese imports across the board next year, and that “full tariffs could trigger first earnings downgrades of Trump era.”
