China’s Upcoming Tariff Changes: Good News & Bad News

The past two months have brought good and bad news in terms of tariffs levied on goods imported into China. Many of these changes will become effective in the first week of July.


Bad news for imports from the US


On June 15, in response to the Trump administration’s approved tariffs on $50b worth of Chinese goods, China announced retaliatory tariffs on the same amount of US goods.


The first wave of tariffs of 25% will cover $34b worth of US goods and will become effective on July 6. The 545 affected product categories include food, electric cars, and some types of hybrid vehicles.


A second set of tariffs on the remaining $16b is under review and will be introduced later, covering goods such as medical equipment, crude oil, and diesel.


US China tariffs July 2018

Good news for cars & consumer goods


Before this latest escalation in the US-China trade war, China’s State Council had approved in May two important sets of tariff reductions (not US-specific) which will become effective on July 1.


  • Cars and car parts: Tariffs levied on most types of passenger cars and some trucks will be reduced from 20-25% to 15%, while tariffs on several types of auto parts will be reduced to 6% from the current levels of 8-25%. The move is a positive sign for automotive companies and consumers, but its impact will be limited given that imported cars only made up around 4% of total car sales in China in 2017.
  • Consumer goods: Tariffs on 1,500 types of consumer products will be cut from an average of around 16% to 7%. Affected products include apparel, cosmetics, health products, and processed foods. These cuts are more comprehensive than the previous round of tariff reductions introduced at the end of 2017.


China tariff cuts July 2018

What’s next?


Volatility in US-China trade relations is likely to continue, but we expect good news to keep rolling in too. China’s tariff reductions reflect Beijing’s continued interest in keeping the door open to foreign trade and investment, boosting domestic consumption, and driving competition up to encourage industrial upgrading.


Get in touch with our Trade & Technology team if you have further questions regarding your China imports or exports Our experts can make sure your trade operations keep running smoothly despite regulatory and market changes.