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6 Feb, 2020 08:36

China to cut tariffs in half on $75 billion of US imports

China to cut tariffs in half on $75 billion of US imports

Beijing has announced that it will halve tariffs on more than 1,700 American products – worth up to $75 billion – to promote “the healthy and stable development” of trade relations between the two countries.

The measure will come into force at 1:01pm Beijing time (5:01am GMT) on February 14, according to China’s Ministry of Finance. Tariffs on 916 US products will be cut from 10 percent to five percent, and levies for some 801 products will be down to 2.5 percent from the previous rate of five percent.

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Around $75 billion worth of US imports that were targeted with tariffs by China in September last year will be affected by the cuts, a separate statement on the ministry’s website says. It also noted the reduction will be implemented on the same day a similar US decision, to halve tariffs on $120 billion of Chinese goods from 15 percent to 7.5 percent, takes effect.

While other measures against Washington are still in place, Beijing says it still hopes that all tariff hikes will be eliminated.

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The reduction comes roughly three weeks after the world’s two biggest economies signed a partial trade agreement, forging a truce in the trade war which lasted for over a year and saw billions of goods placed under tit-for-tat tariffs.

Beijing’s announcement sent global stocks higher on Thursday. Asian markets extended their gains, with Japan’s key Nikkei 225 index up 2.38 percent, Hong Kong’s Hang Seng index rising 2.45 percent, and China’s Shanghai Composite jumping around 1.72 percent. Meanwhile, US stock futures were also in the green, with the Dow Jones Industrial Average, S&P 500 and Nasdaq futures all jumping more than 0.5 percent.

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