Market Updates

China has cut tariffs on over 700 items to open market and lower costs for domestic consumers

China released an announcement at the end of December, stating that as of January 1, 2019, it will be reducing or removing some import and export tariffs on 706 HTS items.  The reductions were made in an effort to open up China's economy as it negotiates a trade deal with the U.S. and to lower costs for domestic consumers.

 

Low to zero taxes on several Chinese import commodities

To actively expand on imports, reduce importing costs, and assist with supply-side reforms, China's ministry of commerce moved to implement a provisional tax rate on imports of more than 700 commodities, including the introduction of zero tariffs on some pharmaceutical raw materials.

Image result for pigs eatingTariffs on US soybeans stopped a key source of animal feed for Chinese farmers, so the ministry of commerce has removed tariffs on a variety of meals including rapeseed, sunflower, and canola, which can be used as an alternative feeds and sourced from countries other than the U.S.  The removal of tariffs on these meals will also help to lower the cost of pork for domestic consumers. 

China has canceled import tariffs on 4 types of solid waste, including managnese slag.  Also canceled are tariffs on lithium iron battery cells for thionyl chloride and new energy vehicles. 

Tariffs on some work trucks were reduced as well, including heavy trucks with cranes (15 percent down to 8 percent) and cement trucks and wreckers (15 percent down to 10 percent).

Tariffs were reduced on luxury items such as raw furs (15 percent down to 10 percent) and pearls (21 percent to zero).

Advanced equipment such as aviation engines and laser welding robots for automobile production lines, natural forages, and natural uranium will also see lower import tariffs. 

Cameras also saw some decreases, falling from 9 percent to 4 percent. Movie camera and projector tariffs are down from 8 percent to 3 percent and tariffs on printing machines and copiers will be reduced from 10 percent to 3 percent.

Additionally, China announced that it will no longer raise the provisional tax rate on 14 information technology products on July 1, 2019, and will implement a fourth round of tariff reductions on 298 IT products

 

Chinese export taxes eliminated for some energy resources

On the export side, 94 items including chemical fertilizers, apatite, iron ore, slag, coal tar, and wood pulp, are no longer subject to export tariffs. Prior to the announcement, export tariffs on many these goods were as high as 40%.

The removal of these export tariffs was done to help reform the Chinese export management system and to improve the quality and efficiency of China's energy resources industry.

 

China implements tax rates from several new international trade agreements

China will implement new, lower tax rates it agreed to in trade pacts with with New Zealand, Peru, Costa Rica, Switzerland, Iceland, Australia, South Korea, Georgia, and the Asia-Pacific Trade Agreement. It will also adjust MFN tariff rates for Bangladesh and Laos under the Asia-Pacific Trade Agreement.

Additionally, China signed an agreement for zero tariffs on imported goods originating from Hong Kong and Macau.

These trade agreements were reached to support construction of "Belt and Road" initiatives and to accelerate the economic and trade cooperation between China and the countries involved.   The efforts also seek to create external conditions conducive to the long-term healthy and stable development of the Chinese economy, the announcement said. 

 

Additional Resources

Ministry of Finance of the People's Republic of China Announcement

Imported Goods Provisional Tax Table (translated to English via Google Translate)

Information Technology Products MFN Tariff Table (translated to English via Google Translate)

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