ArrowArtboardCreated with Sketch.Title ChevronTitle ChevronEye IconIcon FacebookIcon LinkedinIcon Mail ContactPath LayerIcon MailPositive ArrowIcon PrintSite TitleTitle ChevronIcon Twitter
Trade war

China throws US a tariff cut as virus disrupts purchase plans

Beijing seeks flexible implementation of 'phase one' trade deal

BEIJING -- The announcement by China that it will cut tariffs by half on $75 billion worth of U.S. goods was likely prompted by the unexpected blow of the new coronavirus.

As the crisis over the epidemic cuts off logistics, blocks customs and hamstrings Beijing's purchasing power, the government looks to be seeking leeway from Washington in meeting its pledge to boost American imports.

Increasing agricultural and industrial imports by $200 billion in two years was central to the initial "phase one" trade deal, signed last month. But the coronavirus has spread quickly since then, forcing China to prioritize face masks and other protective gear at its borders. Some experts expect other shipments to face delays at customs until summer.

If Chinese imports stall, the U.S. could reimpose tariffs on Chinese goods for failing to abide by the trade deal, which goes into effect Feb. 14. Beijing is believed to be asking for some flexibility, based on a clause in the agreement that calls for a consultation in the case of a natural disaster or other unforeseeable events.

"China is concentrating on battling coronavirus. The US government should be flexible on China-US phase one trade deal as a way to show goodwill to Chinese people," tweeted Hu Xijin, editor-in-chief of the Communist Party-affiliated Global Times.

White House economic adviser Larry Kudlow indicated that Washington was aware of the situation, saying in a TV interview Tuesday that "the export boom from that trade deal will take longer because of the Chinese virus."

In the meantime, China is taking steps to appease the U.S. by sticking to the terms of the trade deal. It said Thursday that it would halve additional tariffs levied on 1,717 U.S. goods last year.

The agreement does not specify exactly when and by how much each country was supposed to lower their tit-for-tat tariffs. But based on past Chinese statements, the two sides appear to have agreed to cut them by equivalent amounts at the same time.

Still, China first told the U.S. about the coronavirus on Jan. 3, according to the Chinese Foreign Ministry, and has since briefed Washington on about 30 separate occasions. It is unclear whether the outbreak would necessarily count as an unforeseeable event, given that both sides were aware of the virus before signing the trade deal.

Sponsored Content

About Sponsored Content This content was commissioned by Nikkei's Global Business Bureau.

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this monthThis is your last free article this month

Stay ahead with our exclusives on Asia;
the most dynamic market in the world.

Stay ahead with our exclusives on Asia

Get trusted insights from experts within Asia itself.

Get trusted insights from experts
within Asia itself.

Get Unlimited access

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this month

This is your last free article this month

Stay ahead with our exclusives on Asia; the most
dynamic market in the world
.

Get trusted insights from experts
within Asia itself.

Try 3 months for $9

Offer ends July 31st

Your trial period has expired

You need a subscription to...

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers and subscribe

Your full access to the Nikkei Asian Review has expired

You need a subscription to:

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers
NAR on print phone, device, and tablet media