China is lowering tariffs on products, including steel additives to make alloys, pork, fruits, raw materials, and semiconductors. The change not only affects US imports but will also apply to standard tariffs on products from 23 countries, including those who have existing trade pacts with China. The most significant potential beneficiary is the US.
As part of this deal, China will decrease the tariff for ferroniobium from 1pc to zero to support high-tech production of high strength low alloy steel production.
Beijing seeks to improve US imports after the Phase I agreement earlier this month to ease Sino-US trade tensions and support a slowing domestic economy. The deal reduces US tariffs on some Chinese imports in exchange for increased imports of American goods, especially farm products.
US Trade Representative Robert Lighthizer said that as part of the agreement, China would buy $200bn in additional US goods and services over the next two years. Bejing concurred that the amount is in line with its population’s growing needs.
Beginning Jan 1, 2020, China will implement lower than most-favored-nation temporary import tariffs on more than 850 products. Beijing stated that the tariff changes are to increase imports of specialty goods or those facing a domestic shortage.
The second wave of trade barrier reductions that will lower most-favored-nation import tariff levels will be enacted in July 2020. China will reduce the rates for 176 information technology products, many of which are sourced from US companies.