By Jon Dougherty
(TNS) If anyone thought that China would renege on its pledge to ease tariffs on hundreds of U.S. goods as part of the historic trade deal signed recently with the Trump administration, those doubts appear to have been tabled, at least for now.
And frankly, we have the Wuhan coronavirus (COVID-19) to thank, in part, for China’s adherence.
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Because of the scope of the pandemic, thousands of Chinese factories have been idled or are operating at partial capacity because more than 60 million people have been quarantined or otherwise had their travel restricted, thus leaving factories and plants short-staffed.
The economic slowdown is costing the Chinese tens of billions of dollars, and so the Communist regime in Beijing is obviously looking to comply with its Washington trade agreement rather than risk renewed economic retaliation from the Trump administration.
The Epoch Times reported Tuesday:
China will grant exemptions on retaliatory duties imposed against 696 U.S. goods, the most substantial tariff relief to be offered so far, as Beijing seeks to fulfill commitments made in its interimÂ trade dealÂ with the United States.
The announcement on Feb. 18 comes after the Phase 1 trade deal between the two countries took effect on Feb. 14 and is the third round of tariff exemptions China has offered on U.S. goods.
China has committed to boosting its purchases of goods and services from the United States by $200 billion over two years as part of the agreement, and has already rolled back some additionalÂ tariffsÂ on U.S. imports after the deal was signed.
U.S. goods eligible for tariff exemptions include key agricultural and energy products such as pork, beef, soybeans, liquefied natural gas and crude oil, which were subject to extra tariffs imposed during the escalation of the bilateral trade dispute.
Some analysts believe that the coronavirus has actually made it more difficult for China to meet its U.S. trade obligations, but the easing of tariffs on hundreds of American goods is just the sort of good-faith measure Washington was looking for, no doubt.
Just last week, the U.S. and China agreed to halve tariffs on billions of dollars’ worth of goods, as the Nikkei Asia Review reported:
The U.S. cut tariffs on Friday forÂ $120 billion of Chinese goods from 15% to 7.5%, marking the first time that sanctions have been eased after nearly two years of escalating trade tensions between theÂ world’s two biggest economies.
China is to reduceÂ its retaliatory duties on some U.S. goods on Friday.
The move by the two countries was timed in conjunction with the start of a “phase one” trade agreement signed in January.
The U.S. has halved tariffs, which took effect last September, for Chinese goods that entered the port after 0:01 a.m. Eastern Time on Feb.Â 14 (2:01 p.m. Japan time the same day). The tariffs were eased onabout 3,200goodsÂ includingÂ consumer electronics and clothing. However, Washington will leave 25% tariffs on another $250 billion-worth of Chinese goods.
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Meanwhile, China will cutÂ its retaliatory tariffs from 10% to 5%, as well asÂ 5% to 2.5% on some U.S. goods worth $75 billion. The tariffs adjustment applies to about 1,700 U.S. imported goods rangingÂ fromÂ oil and soy beans toÂ chemical products.
It’s a good bet that Beijing will continue to adhere to conditions of the agreement as the country begins to claw its way back, economically, from the decline in output and GDP caused by the virus. As we noted in a Monday report, the Chinese regime’s survival may just depend on it.
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