China has implemented its first action under the 'tariff war truce' agreement with the United States.
On the 14th at 12:01 p.m. (local time), China announced that it has initiated a measure to reduce additional tariff rates on imports from the U.S. from 125% to 10%.
Specifically, it suspended the application of 91 percentage points (P) from the existing additional tariff rate of 125%. Of the remaining 34%, 24 percentage points will be temporarily suspended for 90 days.
This is a measure stemming from the tariff reduction agreement announced by the United States and China on the 12th in Geneva, Switzerland. The two countries had agreed in a joint statement to cancel 91% P of the additional tariff rates on their respective imports and to defer 24% P for 90 days.
As a result, China's additional tariff rate on the U.S. is now lowered to 10%. The U.S. maintains a 20% tariff on synthetic opioids related to fentanyl, imposed at 10% each in February and March of this year. Additionally, the extra tariff rate on China applied since Donald Trump's inauguration is 30%.
The U.S. also introduced further measures beyond the overall tariff reduction on Chinese imports starting the 13th. It includes a plan to lower the tariff rate on small packages under $800 (about 1.14 million won) from 120% to 54%.
The China Tariff Policy Committee added in the previous day's tariff reduction announcement that "a significant reduction in bilateral tariff levels is in line with the expectations of producers and consumers in both countries" and that it is "beneficial for economic exchanges between China and the U.S. and for the global economy."