On 23 December, the State Council’s Chinese Customs Tariff Commission reported that it would temporarily change import tariffs on 859 goods to come into effect on 1 January 2020.
The modified tariffs will be lower than the 2020 tax rate for the most favored country. Less than two weeks after China and the US signed a Phase One agreement in their continuing trade negotiations, China seems to point out that it is adamant about diversifying its global trade ties, even as it is negotiating a full deal with the Trump administration.
The reduced tariffs also demonstrate the willingness of China to continue opening its economy to meet the growing needs of businesses affected by the trade war. The new circular suggests that further tariff cuts will be made in accordance with China’s free trade agreements with New Zealand, Argentina, Costa Rica, Canada, Norway, Singapore, Australia, South Korea, Georgia, Chile, and Pakistan as well as the Asia-Pacific Trade Agreement.
The tariff quota allocation system will remain the same for goods like wheat, fertilizer, maize sugar, and wool.
As of 1 July 2020, China must lower its most-favored nation’s import tariffs on 176 IT goods. Which products are the modified import tariffs going to affect? The lowered tariffs are intended to improve import opportunities in key areas where China is facing a “significant domestic shortage” or where there is “high demand for international specialty products,” as described in the Finance Ministry’s announcement.
To boost domestic supply and stabilize pork prices, the list reduces import tariffs on frozen pork from 12 percent to eight percent.
China will lower raw material tariffs on medicinal products for conditions such as diabetes and asthma to reduce the cost of medicinal products and promote the production of new medicinal products to better meet the needs of its aging population.
Lower tariffs seen as a required importation boost, the economy of China is rising at its slowest rate in nearly 30 years and could face more downward pressure next year.
Such rapid cuts in tariffs are good news for Chinese companies, customers and foreign exporters alike.
Tariff cuts promote the co-ordinated growth of China’s trading climate at a wider level-supporting the strategic development of the country’s free trade zones and expanding its existing trade networks for the Belt and Road Initiative. Below is a list of the goods that have been covered by these lowered tariffs.