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20 Sep, 2018 11:40

Beijing plans to cut import tax for most trading partners as trade war with US deepens - report

Beijing plans to cut import tax for most trading partners as trade war with US deepens - report

China’s government is reportedly planning to curb the average tariff rates on imports from most of its trading partners as soon as October in an attempt to bring down consumer costs amid growing trade tensions with the US.

The ongoing trade war between the world’s two largest economies has intensified over recent weeks after Washington introduced a new wave of tariffs, targeting $200 billion in Chinese imports. Beijing responded with fresh tariffs on $60 billion worth of US products exported to China. The measure comes into effect next week.

Cutting export duties for China’s other trading partners is aimed at boosting domestic consumption, which is expected to bolster the slowing economy, according to people familiar with the issue, as quoted by Bloomberg. The move comes months after China reduced tariffs on a wide range of consumer goods.

China still charges a higher average tariff on imports compared to other developed economies with its most-favored nation (MFN) average tariff currently standing at 9.8 percent. MFN is a level of treatment awarded by one state to another in international trade. Along with the principle of national treatment, MFN is one of the cornerstones of WTO trade law. At the same time, the US’ average applied MFN rate was 3.4 percent in 2017.

President Trump advocated more reciprocal and ‘fairer’ trade relations with China throughout his election campaign in 2016. Trump had repeatedly slammed Chinese companies for alleged theft of US intellectual property and accused Beijing of unfairly subsidizing them.

On Wednesday, Chinese Premier Li Keqiang said that China is planning to further reduce the tariffs but no details on the issue were provided. Li stressed that Beijing wouldn’t devalue the yuan to boost Chinese exports amid the trade war.

“We must uphold multilateralism, the rules of free trade,” the Premier Li said in a speech to a World Economic Forum event. “No matter what changes are needed to the rules, it brings benefits. If there are problems, negotiation is needed to solve them.”

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