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 U.S. deepens. Premier Li Keqiang said Wednesday that China would further reduce the tariffs, without elaborating.
By cutting duties on goods even as it retaliates against President Donald Trump’s trade war with higher charges on some U.S. 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 percent lower at 6.8562 per dollar.
The onshore rate was little changed at 6.8505. China’s most-favored nation average tariff currently stands at 9.8 percent. The MFN rule requires all countries to be treated equally unless specific exceptions are agreed, and the U.S. is also covered by MFN status.
China still has a higher average tariff rate than many developed economies. The U.S.’ average applied MFN rate was 3.4 percent in 2017, and in general the Trump administration has accused China of being a protectionist economy. On Wednesday, Premier Li said that his government would not devalue the currency in order to boost its exports amid the trade war.