China has announced that it will cut additional tariffs on $75 billion worth of US imports by half as the coronavirus outbreak escalates.
The decision to reduce the additional tariffs by 50%, which comes amidst the escalating coronavirus outbreak, will affect $75 billion worth of US goods that China imposed tariffs on last September.
China's State Council Tariff Commission stated that beginning next week, it will cut the additional 10% tariff rate it previously imposed on some goods down to 5% while thosethat were taxed an extra 5% will now be levied 2.5%.
The commission also mentioned that other tariffs on US goods will remain while it continues to work on exemptions. In a statement, the commission said: "China hopes that both sides will abide by bilateral agreements and make an effort to implement relevant provisions so that we can boost market confidence, promote bilateral trade relations and global economic growth."
Tommy Wu, an economist with Oxford Economics, pointed out that these tariff rollbacks were expected as a response to the US cutting its September round of tariffs by half in the "phase one" trade deal.
Wu said: "Nevertheless, the announcement may help boost market sentiment, especially at a time when China is battling with the economic impact of the coronavirus outbreak."
Meanwhile. US officials have expressed earlier the possibility of the outbreak delaying  exports of US goods to China. Larry Kudlow, US President Donald Trump's chief economic adviser, said: "It is true the 'phase one' trade deal, the export boom from that trade deal, will take longer because of the Chinese virus."
Under the phase one trade deal, China will buy an additional $200 billion worth of US goods and services over the next two years. In exchange, the US has agreed to bring down the tariffs on $120 billion in Chinese products from 15% to 7.5%.
A significant portion of the new purchases will be from agricultural goods. Under the deal, China will purchase an additional $12.5 billion of those goods in 2020 and $19.5 billion the following year, as compared to 2017.
