China to increase export tax rebates on 397 products to boost shipments
beijing — China said on Friday it will increase export tax rebates for 397 items ranging from some steel products to electronic ones, in a bid to boost prospects for shipments amid its trade war with the United States.
The move comes as word is widely awaited on whether US President Donald Trump will impose tariffs on another $200 billion of imports from China. A public consultation period in Washington on the proposal has just ended.
To date, the US has imposed tariffs on $50 billion of Chinese products, and Beijing has reciprocated.
On Friday, China’s finance ministry said that effective September 15, tax rebate rates for light-emitting diodes (LEDs), lithium batteries, multi-component semiconductors, machinery products, books and newspapers will be increased to 16 per cent.
The ministry, in a statement on its Website, did not say what the current rebate levels are on those products. China assesses a 16 per cent valueadded tax on some exports, so a rebate of 16 per cent will mean exporters get back the full amount paid. “This is in effect to negate the impact from US tariffs,” said Mei Xinyu, a researcher at a think tank affiliated with the Commerce Ministry.
For some other products, the rebate will be increased but not to 16 per cent. According to the statement, China will increase rebates for stainless steel products to nine per cent and steel pipes to 13 per cent. It was not clear immediately what the level of current rebates are. Rates for chemicals also being increased, the statement said.
Exports are one of China’s key growth drivers, and any loss of momentum for them will pile more pressure on its already cooling economy.
China’s export growth has exceeded analysts’ expectations for the past five months, with some analysts believing Chinese exporters are rushing out shipments to beat fresh US tariffs.
Last week, China’s state council said that it decided to increase the rate of export tax rebates for some products to support the economy.
Trump to evaluate comments
US President Donald Trump will not make any decisions on his threatened tariffs on another $200 billion worth of Chinese goods before officials evaluate public comments on them, White House economic adviser Larry Kudlow said on Friday.
The US Trade Representative’s office collected 5,914 individual comments on the proposed tariffs before a public comment period ended late on Thursday night.