New Tariff Cuts

On July 1, China introduced huge new tariff cuts covering consumer goods and automobiles to help increase imports.

Tariffs on 1,449 taxable consumer goods including home appliances, food and beverages, cosmetics, and medicines were reduced from an average rate of 15.7 percent to 6.9 percent, according to the Customs Tariff Commission of the State Council.

It was the fifth round of tariff cuts on consumer goods since 2015.

“Significantly reducing the import tariffs on daily consumer goods is conducive to expanding China’s opening up and serves as a key measure in the country’s initiative to open its market,” the commission said earlier in a statement.

Meanwhile, vehicles and auto parts also saw significant tariff reductions. Tariffs of 20 to 25 percent on cars were cut to 15 percent, and duties on auto parts were lowered to 6 percent from previous levels of 8 to 25 percent.

Analysts believe the intensive measures will help China meet increasing domestic demand, achieve balanced trade and share development dividends with the rest of the world.

“Widened access for foreign goods will allow Chinese consumers to enjoy more quality products and prompt domestic companies to improve their competitiveness,” said Zhang Jianping, a researcher at the Chinese Academy of International Trade and Economic Cooperation.

The move is part of China’s recent push to further open up its economy, as the country embraces the 40th anniversary of reform and opening up, the primary factor behind its economic success.