WASHINGTON -- The U.S. cut tariffs on Friday for $120 billion of Chinese goods from 15% to 7.5%, marking the first time that sanctions have been eased after nearly two years of escalating trade tensions between the world's two biggest economies.
China is to reduce its retaliatory duties on some U.S. goods on Friday.
The move by the two countries was timed in conjunction with the start of a "phase one" trade agreement signed in January.
The U.S. has halved tariffs, which took effect last September, for Chinese goods that entered the port after 0:01 a.m. Eastern Time on Feb. 14 (2:01 p.m. Japan time the same day). The tariffs were eased onabout 3,200goods including consumer electronics and clothing. However, Washington will leave 25% tariffs on another $250 billion-worth of Chinese goods.
Meanwhile, China will cut its retaliatory tariffs from 10% to 5%, as well as 5% to 2.5% on some U.S. goods worth $75 billion. The tariffs adjustment applies to about 1,700 U.S. imported goods ranging from oil and soy beans to chemical products.
China plans to boost imports of services and industrial goods from the U.S. by $200 billion over the next two years, an ambitious goal that sets the bar at a 70% jump from its 2017 record in which imports of U.S. goods and services totaled $186 billion. The country aims to strengthen its protection of intellectual property rights while also opening up its financial services market.
However, the recent spread of the new coronavirus has disrupted supply chains and raised concerns over China's economy. U.S. Treasury Secretary Steven Mnuchin told the Senate Finance Committee members on Wednesday that the implementation of the phase one trade deal with China has been affected by the virus outbreak.
"Obviously, our biggest focus is implementing phase one. That, to a certain extent, has slowed down given the virus as expected," said Mnuchin.