President Trump’s tour across Asia included a productive visit to China — one that included trade deal negotiations and talks of sanctions against North Korea. Shortly after the President’s visit concluded, China issued a new announcement on trade. It’s looking good for President Trump.
According to ABC News, China stated on Friday that the nation issued a number of tariff cuts affecting imports, namely consumer goods — much of which come from the United States. This measure fulfills a promise made by President Trump to improve and balance the trade relationship with China.
The tariffs affect 187 products — primarily consumer goods ranging from avocados, mineral water, and even baby strollers. The effort is intended to boost their own economic growth driven by domestic consumption, and additionally reduce China’s reliance on trading and investment.
The tariff reductions include “taxes slashed to an average rate of 7.7 percent from 17.3 percent.”
China has been pressured by the US, Europe, and others to reduce tariffs that would enable improved access to the growing Chinese market. Meanwhile, Chinese leaders have struggled to find ways to boost domestic economic growth while minimizing dependency on foreign trade.
Experts have not yet projected how China’s trade balance may be impacted by the tariff cuts. A similar tariff measure was taken in 2015 for imported clothing, shoes, and other consumer goods. If China can import more foreign consumer goods for Chinese companies to sell, it could result in increased consumer spending, as well as job growth.
Economist Lu Zhengwei of Shanghai’s Industrial Bank stated, “We know that consumer products are not products of high value and we can’t depend on them to achieve a fundamental turnaround for China’s trade imbalance. But step by step, it may work if we keep doing things that are mutually beneficial to both sides and good to the markets.”
Last year, China reported a global trade surplus of $510 billion. However, their totals of contracted trade indicated weak demand, both foreign and domestically.
President Trump has long expressed that improving the trade deficit with China was a priority for the United States. This led him to discussions with Chinese President Xi Jinping during his visit to China. The visit concluded with a $253 billion trade deal between the two nations, intended to improve trade surpluses and market barriers. China also promised to reduce tariffs on auto imports, but has not yet released an expected date for that.
The American Chamber of Commerce in China stated they were concerned that President Trump’s emphasis on trade goods may detract from other important issues, including increased access to finance, health care, and other key industries in China.
However, President Trump’s efforts serve a means of balancing trade between the nations, which has been tipped unfairly in the past.
China’s announcement to reduce tariff — and discussions of reducing additional tariffs — shows that President Trump made headway in his trade negotiations with China. He is working toward fulfilling promises made on the campaign trail, and it is paying off for America. Hopefully, China will also follow through with the sanctions on North Korea, and President Trump will score another victory for America.