China slashes tariffs on wide range of consumer products

China is cutting import tariffs on consumer items including cosmetics and health products.
China is cutting import tariffs on consumer items including cosmetics and health products.PHOTO: AGENCE FRANCE-PRESSE

SHANGHAI • China has announced it will cut tariffs sharply on July 1 for an eclectic array of imports, the latest in a series of moves by Beijing to dismantle steep trade barriers at a time of rising frictions with the United States.

But the categories selected for tariff cuts cover few US goods and appeared to be targeted at China's goal of developing sophisticated industries rather than low-value mass manufacturing.

China, in other words, is making a modest peace offering, without really giving up much.

From next month, the average tariff rate on 1,449 imports from most favoured nations will be reduced to 6.9 per cent from 15.7 per cent, equivalent to a cut of about 60 per cent, the Finance Ministry said on its website on Thursday.

That followed an announcement from the State Council, or Cabinet, on Wednesday that China will cut import tariffs on consumer items including apparel, cosmetics, home appliances and drugs.

Import tariffs for apparel, footwear and headgear, kitchen supplies and fitness products will be more than halved to an average of 7.1 per cent from 15.9 per cent, with those on washing machines and refrigerators slashed to just 8 per cent, from 20.5 per cent.

Tariffs will also be cut on items such as aquaculture and fishing products and mineral water, from 15.2 per cent to 6.9 per cent. Cosmetics, like hair products, and some medical and health products, will also benefit from a tariff cut to 2.9 per cent from 8.4 per cent.

In particular, tariffs on drugs ranging from penicillin to insulin will be slashed to zero from 6 per cent before.

"The goods seeing cuts are not relevant to trade with the US," said Mr Derek Scissors, a trade specialist at the American Enterprise Institute, a Washington think-tank.

"For China, it fits the goal of moving up the value chain - heavy subsidies for semiconductors and now less protection for textiles and consumer appliances."

The move could nonetheless have political benefits for Beijing.

China is energetically trying to rally other governments to its side in its trade showdown with the US. Beijing's latest move could assuage concerns from many European countries and developing nations about their own trade deficits with China.

NYTIMES, REUTERS

A version of this article appeared in the print edition of The Straits Times on June 02, 2018, with the headline 'China slashes tariffs on wide range of consumer products'. Print Edition | Subscribe