China plans tariff relief for allies as trade war with US deepens

China is planning to cut the average tariff rates on imports from the majority of its trading partners as soon as next month in a move that will lower costs for consumers as a trade war with the US deepens.

Premier Li Keqiang said Wednesday that China would further reduce the tariffs, without elaborating. The two people who spoke on the new reduction asked not to be named as the matter isn’t public yet.

By cutting duties on goods even as it retaliates against President Donald Trump’s trade war with higher charges on some US goods, China is following through on long-stated goals to boost imports. The move comes as the nation is trying to stimulate domestic consumption to support a slowing economy, and follows similar cuts to tariffs in July on a wide range of consumer goods.

The offshore yuan pared loss to rise briefly following the news, and then weakened to trade 0.07 per cent lower at 6.8562 per dollar as of 1.02 pm in Hong Kong (10.32 am IST). The onshore rate was little changed at 6.8505.

“By further cutting import taxes, China is sending a message that it will keep opening up and reform no matter how the trade war goes. It’s more like a commitment to both domestic and international audience. It’s a gesture,” said Tommy Xie, an economist at Oversea-Chinese Banking Corp in Singapore. The Ministry of Finance didn’t immediately respond to a request for comment on the matter. China’s most-favored nation average tariff currently stands at 9.8 per cent.