China carefully cherry-picking tariffs to impose in trade war with US
Beijing opting for lower duties for items where substitution is more difficult
Beijing has been forced to be more restrained in its trade war with Washington, levying lower duties on US goods it cannot easily buy elsewhere, as it scrambles to match the near-exhaustive list of US tariffs proposed on Chinese goods, analysts say.
Chinese authorities on Friday proposed four different tariff amounts ranging from 5 to 25 per cent on the US$60 billion of US products in its latest round of countermeasures, with lower duties for items that have lower levels of substitution.
The move would slap the highest 25 per cent tariff on imports such as liquefied natural gas (LNG), as well as consumer goods from fishing rods to cotton skirts, metals such as iron and copper ore, and all types of wood, according to a statement from the finance ministry.
From there, tariffs would be lowered on a spectrum for different products from 20 per cent to 10 per cent, with the lowest 5 per cent duties issued for goods such as aircraft and automobile parts, chemical wood pulp, and various medical instruments – substances which are needed for China’s industrial production.
Wei Jianguo, former vice-minister of commerce, described the spectrum-based tariff strategy as one of “precision” in order to protect China’s economic and industrial interests, even if it does not match the magnitude of US tariff threats.
“The trade war requires a targeted approach, taking care of the market needs while avoiding excessive losses is China’s comprehensive consideration,” he said. “The items on the 5 per cent tariff list have more chemical and industrial parts, so our thinking is more precise, to protect domestic enterprise and production while also taking care of the global production, supply and service chains.”