China: Tariff downward adjustment for goods from US to 5% and 2.5%.


The Chinese State Council Customs Tariff Commission issued an announcement to adjust tariffs on some imported goods originating in the United States.


On February 6, 2020, the Chinese State Council Customs Tariff Commission (also known as the "Tax Commission") issued an announcement to adjust the tariff levy measures on approximately 75 billion U.S. dollars of imported goods originating in the United States.


From 10% -> 5% and from 5% to 2.5%

Backdated to September 1, 2019, the tax rate for products that have been levied 10% will be adjusted to 5%; the tax rate for products that have been levied 5% will be adjusted to 2.5%.


Background

On August 23, 2019, China implemented the third round of tariff countermeasures against the US and issued the

  1. "Announcement on Tariffs on Certain Imported Goods (Third Batch) Imported from the United States" (Tax Commission Announcement [2019] No. 4)

  2. "State Council Tariff Tariff Commission Announcement on Restoring Additional Tariffs on Automobiles and Parts Originally Produced in the United States" (Taxation Commission Announcement [2019] No. 5)

These additional duties ranged between 10% and 5% of customs duty and were imposed in two batches on two lists (For US cars and parts, tariffs of 25% and 5% tariffs were scheduled to kick in in December 2019):

  1. List 1, imposing additional tariff measures of US goods worth 75 billion were in force since September 1, 2019.

  2. List 2 included the imposition of additional tariff measures worth 75 billion US dollars on US products and the restoration of tariffs on US automobiles and parts. The List 2 measures were originally scheduled to be implemented on December 15, 2019.

On December 15, 2019, the Tax Commission has announced that 10% and 5% tariffs will not be levied on the second list of 75 billion US dollars of goods originally scheduled to be levied tariffs on that day.


On 6 February 2020, China decided that starting from 13:01 on February 14, 2020 (timezone not yet specified), the 10% and 5% additional duty increase will both be cut by 50%.


Why does this change occur?

On January 16, 2020, the United States issued an announcement that from February 14, 2020, $ 120 billion worth of goods coming from China, which is currently subject to 15% additional duty, will be revised downward to 7.5% in order to alleviate economic and trade frictions and expand economic and trade cooperation, China has adjusted relevant measures simultaneously.

The next step of adjustment depends on the development of the Sino-US economic and trade situation. "We hope to work with the United States towards the ultimate elimination of all tariff increases," China's Ministry of Finance said in a statement


Official Statement (!google translation - please rely only on the official source!)


February 6, 2020 Source: Office of the Tariff Commission of the State Council


In order to promote the healthy and stable development of Sino-US economic and trade relations, in accordance with the laws and regulations of the Customs Law of the People ’s Republic of China, the Foreign Trade Law of the People ’s Republic of China, the Regulations of the People ’s Republic of China on Import and Export Tariffs, and basic principles of international law, the Tariff Commission of the State Council, adjusts tariffs on about 75 billion US dollars of imports originating in the United States.


From 13:01 on February 14, 2020, and backdated to September 1, 2019, 10% tariffs will be added to the goods, and the tax rate will be adjusted to 5%. The rate was adjusted to 2.5%.


In addition to the above measures, other tariff measures on the United States and Canada continue to be implemented in accordance with regulations. The elimination of tariffs on the United States and Canada continued.


China hopes that both parties can abide by the agreement, strive to implement the relevant content of the agreement, strengthen market confidence, promote the development of bilateral economic and trade relations, and promote world economic growth.


Sources:

Ministry of Finance in China

CNBC

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