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China to halve tariffs on some U.S. imports as virus risks grow

Credit: Reuters Studio
Published on February 6, 2020 - Duration: 01:33s

China to halve tariffs on some U.S. imports as virus risks grow

China on Thursday said it would halve additional tariffs levied against 1,717 U.S. goods last year, following the signing of a Phase 1 deal.

Ciara Lee reports

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China to halve tariffs on some U.S. imports as virus risks grow

China is to halve additional tariffs levied against over 1,500 U.S. goods.

It's the latest move in a truce between the world's two largest economies after a bruising trade war, and follows the signing of a Phase 1 deal.

But it's also being seen as a move by Beijing to boost confidence amid a coronavirus outbreak that has disrupted businesses.

China's finance ministry said that from February 14th, additional tariffs levied on some goods will be cut to 5% from 10%, and others lowered to 2.5% from 5%.

It said the reductions correspond with those announced by the U.S, on Chinese goods.

The news was welcomed by financial markets, and comes as Beijing seeks to shore up investor and business confidence while the outbreak casts uncertainty over the economic outlook.

The yuan hit its highest in two weeks, while Asian stocks rallied after the announcement.

MSCI's broadest index of Asia-Pacific shares outside Japan jumped 1.6%, and Japan's Nikkei rose 2.3%.

The tarriff relief added to hopes the global economy may be able to avoid a major shock from the rapidly-spreading coronavirus, which has killed over 500.

But casting fresh doubt was the prospect raised in a local media report that Beijing could invoke a disaster-related clause in the trade agreement.

That might allow China to avoid repercussions even if it can't fully meet the targeted purchases of U.S. goods and services for 2020.

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