China last week slashed in half tariffs on $75 billion of U.S. imports as part of its effort to implement a recently signed trade agreement with Washington.
These are the first steps in a deal signed Jan. 15 in which China agreed it would buy an additional $200 billion in U.S. goods over the next two years. Those increases include an additional $32 billion in agriculture exports and $78 billion from the manufacturing sector.
The elevated imports would surpass the value of China’s 2017 imports, which was $186 billion. The projected new totals would be $263 billion in exports in 2020 and $309 billion in 2021, an increase without precedent in the history of U.S. trade.
The tariff reductions in China began Friday. Also Friday, the U.S. lowered tariffs on roughly $120 billion in Chinese goods.
These first steps of the truce come amid a coronavirus outbreak that began in China in late January and has spread to more than a dozen countries. The outbreak has caused a near-standstill in economic activity in the country, which has led to doubts about Beijing’s ability to follow through on the phase-one trade deal.
Even so, the decision to reduce tariffs indicates that China intends to implement the deal. In a statement accompanying last week’s announcement, the Finance Ministry said the decision was intended to “alleviate economic and trade frictions and expand economic and trade cooperation” between the two countries.
Source: Wall Street Journal