China announced measures to support some of the exporters targeted by US President Donald Trump’s barrage of higher tariffs.
The Ministry of Finance said it will raise export rebate rates for 397 goods, ranging from lubricants to children’s books, meaning that firms shipping such products abroad will pay less value-added tax. The new rates will be effective from September 15, the ministry said Friday in a statement on its website.
About a sixth of the items were among the products already hit by US tariffs recently imposed on $50 billion in Chinese goods, such as pressure-reducing valves or lubricants. Bloomberg identified these items by comparing the products on the VAT list to items on the lists of goods hit by higher levies. At least another 67 items getting a rebate may soon be hit by the next round of tariffs.
Trump said Friday he’s willing to slap tariffs on an additional $267 billion in Chinese goods, on top of duties on $200 billion in imports that the US is already considering. If the president follows through, the threatened tariffs and those already in place would more than cover the value of all goods the US buys from China, according to US government data from last year. The US imported $505 billion of Chinese products in 2017, Census Bureau figures show.
There may be other products getting assistance which are a targt for higher tariffs, but aren’t included in the above tally. For example, China said it will lift tax rebates for integrated circuits, and these have been hit by US tariffs, but the item is not included in the above tally due to the differences between the Chinese and US trade code lists.
“These are basically fiscal subsidies to offset the negative impacts of the tariffs,” said Li Yishuang, a Shanghai-based economist at China Securities Finance Co. “But they won’t be able to mitigate all the shocks.”