China cuts tariffs ahead of Ross’ visit

$375B bilateral trade surplus top concern of commerce secretary

SHANGHAI — China announced Thursday evening that it would cut tariffs sharply July 1 for an eclectic array of imported goods, the latest in a series of moves by Beijing to dismantle steep trade barriers at a time of rising frictions with the United States.

The tariff cuts came less than two days before Commerce Secretary Wilbur Ross is due in Beijing for wide-ranging talks aimed at addressing U.S. frustrations with China’s $375 billion bilateral trade surplus with the United States. But the categories the Chinese Finance Ministry selected for tariff cuts cover few U.S. goods and appeared to be targeted at China’s goal of developing sophisticated industries

The moves came as China and the United States, the world’s two biggest economies, continued their wide-ranging economic and diplomatic sparring. The countries have alternated between attacking each other over trade issues and working together on efforts to rid North Korea of its nuclear weapons. At times, President Donald Trump has praised his Chinese counterpart, Xi Jinping, at other times he has swiftly criticized Beijing for its trade practices, sometimes in quick succession.

In its latest action, China is making a modest peace offering, without really giving up much.

Some of the 1,449 categories of goods slated for tariff cuts involve food products from other countries, like fish, olives and grilled seaweed. Other categories include low-value manufactured goods like handbags and certain inexpensive garments, typically made in factories that have already been shifting from China to lower-wage competitors like Bangladesh, Ethiopia, India and Vietnam.

Christopher Rogers, a trade analyst at Panjiva, an international commerce data firm recently acquired by S&P Global Market Intelligence, estimated that the tariff cuts would cover about 1.1 percent of China’s $1.95 trillion in annual imports. “The cuts are more to do with keeping a lid on inflation and improving consumer spending power than to do with keeping President

China is energetically trying to rally other governments to its side in its trade showdown with the United States. But by cutting tariffs in more than 1,000 lightly traded categories, China could end up reducing its average tariff considerably without actually running the risk of a big surge in imports.

Xi, the Chinese president, had called during a speech in April for reductions in Chinese tariffs on imported cars and some consumer goods, as part of Beijing’s long-term policy of gradually opening to international competition.