China announced it would halve tariffs on some goods imported from the US in a move expected to bolster market sentiment that has been hit by the coronavirus epidemic.
The country’s finance ministry said in a statement on Thursday that it would lower tariffs on some goods from 5 per cent to 2.5 per cent and cut those on others from 10 per cent to 5 per cent on February 14. The reductions apply to tariffs applied on 1,717 US products imposed by China in September.
Washington plans to halve tariffs on some Chinese goods on February 14 that had been imposed last autumn, according to a notice to the Federal Register by the US Trade Representative.
“China will adjust its measures at the same time to alleviate economic and trade frictions and expand economic and trade co-operation,” said a Chinese finance ministry spokesperson.
This week Larry Kudlow, President Donald Trump’s top economic adviser, acknowledged that China’s large scale purchases of US goods could be delayed because of the coronavirus outbreak.
China’s CSI 300 index of Shanghai- and Shenzhen-listed stocks were 1.3 per cent higher following the announcement, while Tokyo’s Topix extended earlier gains to 2.5 per cent.
On Thursday, China’s National Health Commission said the death toll in the country from the coronavirus outbreak had exceeded 500 with more than 28,000 confirmed infections. The vast majority of deaths have been in Wuhan and the surrounding province of Hubei, the centre of the outbreak.
The epidemic has prompted concerns it could hit growth in the world’s second-biggest economy, which slowed to a three-decade low last year. The virus has resulted in widespread factory closures in China, disrupting the region’s supply chains.
China’s central bank this week pumped hundreds of billions of dollars into its financial system to support the economy.
Beijing’s decision to reduce tariffs comes weeks after it signed a “phase one” deal with Washington that paused the two countries’ trade war. The agreement prevents further tariffs from being imposed by either side, but left the bulk of US tariffs on $360bn of Chinese goods in place.
President Donald Trump said in January that the remaining tariffs would remain until a second phase of the deal was agreed. The truce did not include a timetable for the removal of Chinese tariffs on US goods. The phase two trade deal is expected to tackle thornier issues, such as forced transfers of foreign technology in China and theft of intellectual property.
Critics of the phase one deal said it offered limited concessions from Beijing beyond a pledge to purchase at least $200bn in US goods and services over the next two years.
Beijing also restated its commitment not to manipulate its currency as a part of the pact. Following the announcement on Thursday the onshore-traded renminbi was 0.2 per cent stronger against the dollar at Rmb6.9609.