As China further opened up the economy, the Ministry of Finance announced on December 24 that China will cut or scrape import and export tariffs on certain items starting 2019.
In an online statement, China announced a new round of tariff cuts, reducing import taxes on more than 700 items from January 1, which is part of China’s efforts to expand imports and reduce domestic consumer costs. This is the third round of tariff reduction announced in 2018.
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Since U.S. soybean tariffs prevent an important source of mixed meals (usually used in animal feed), China will impose zero tariffs on various meals, including sunflower and canola.
Some raw materials used for medicines will also be subject to zero tariffs, and the tax rate for high-tech imports will be set “relatively low”, including aircraft engines with a tax rate of 1%, and a welding robot for automotive assembly lines with a tax rate of 5 %.
Starting from the New Year, China will also remove export tariffs on 94 items, including fertilizers, iron ore, coal tar and wood pulp. At present, the export tariffs on these goods are as high as 40%.
The Ministry of Finance said that China will also impose conventional tariffs on products from 23 countries and regions, including further tariff reductions based on free trade agreements between China and relevant countries. This will result in lower tariffs for trading partners such as New Zealand, Peru and Costa Rica.
The move aims to support the “Belt and Road Initiative” and the establishment of free trade areas, accelerate economic and trade cooperation between China and relevant countries, and create favorable external conditions for the long-term healthy and stable development of the economy.
Some Asia-Pacific Trade Agreement member countries will also benefit from this tax reduction. According to the relevant trade agreement, goods imported from Hong Kong and Macao to the Chinese mainland will enjoy zero tariffs. Under the Asia-Pacific Trade Agreement, the preferential tariffs between China and Bangladesh or Laos will be adjusted as the most-favored-nation (MFN) tariff rates.
The Ministry of Commerce said that from July 1, 2019, China will also reduce the MFN rates of 298 information technology products.
In order to expand the economy’s opening to the outside world, China lowered tariffs on a range of products from medicines to automobiles in 2018, and the total tariff level fell from 9.8% to 7.5%.