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China signalled lower import tariffs on consumer products from July 1

posted onMay 30, 2018
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China is reducing import duties on a range of consumer goods including machines, apparel and cosmetics starting from July 1, the state council, or cabinet, said on Wednesday.

The move, which was announced after a state council meeting led by Premier Li Keqiang, was the third tariff cut in six months on selected imports in what the government says is an effort to improve consumer choice and encourage domestic consumption.

Import tariffs for apparel, footwear and headgear, kitchen supplies and fitness products will be more than halved to 7.1 percent from 15.9 percent, with those on washing machines and refrigerators will be cut from 20.5 percent to 8 percent.  Tariffs will also be cut on processed foods such as aquaculture and fishing products and mineral water, from 15.2 percent to 6.9 percent.

Cosmetics, such as skin and hair products, and some medical and health products, will also benefit from a tariff cut to 2.9 percent from 8.4 percent, the government said in the statement on its official website.

It did not give details of what medical and health products were covered. Beijing has pledged to take steps to increase imports amid rising tension with some of its biggest trade partners, such as the United States.

In December, China announced tariff cuts on 187 categories of consumer goods, including food, health supplements, pharmaceuticals, garments and recreational goods. That step boosted shares of companies including Nestle SA and Danone. 

The new tariff cuts would give foreign producers of high-end versions more access to the Chinese market. Economists say encouraging consumers to buy foreign goods from Chinese retailers instead of while traveling abroad also can help generate jobs

China will work hard to maintain its status as a major destination for foreign investment, and create a fairer, more transparent and convenient investment environment, the statement added.

Earlier this month, Beijing said it would cut import tariffs on the majority of autos to 15 percent from 25 percent, effective from July 1. Duties on auto parts would be cut to 6 percent from mostly around 10 percent. 

However, the Trump administration launched a national security investigation into car and truck imports, the U.S. Commerce Department said May 23.

The U.S. recently agreed to put tariffs on China on hold as Beijing agreed to purchase more from the U.S.

The world's two largest economies have threatened in recent months to slap tariffs on tens of billions of dollars of each other's products. 

But top officials from the two countries held talks in Washington on Thursday aimed at finding a way out of their bitter trade dispute. Negotiations are set to continue Friday. China also said Friday that it's removing a huge import tax it recently imposed on US exports of sorghum, a move likely to help ease trade tensions. 

The Chinese Commerce Ministry said in statement the heavy import charges it placed on US sorghum last month"are not in line with the public interest." 

Experts say China, which bought $130 billion of American goods last year.

With reporting by AP, Reuters, CNN

U.S. trade in goods with China at a glance

Month               Exports     Imports     Balance
January 2018     9,835.3       45,788.0    -35,952.8
February 2018    9,806.1      39,067.6    -29,261.5
March 2018        12,382.1     38,256.7    -25,874.6
TOTAL 2018     32,023.4    123,112.4   -91,088.9

Note: All figures are in millions of U.S. dollars on a nominal basis (Source: U.S. Census Bureau)