Photo: AFP
Photo: AFP

A report on Wednesday says that China is considering slashing tariffs on a host of products, ranging from cosmetics to food, after an earlier announcement that levies on car imports will see a reduction. The new round of tariff cuts would potentially go into effect as early as July 1, the same effective date as for the move on car imports.

Bloomberg broke the story, citing people familiar with the matter, just after Trump announced he was ordering the US Commerce Department to look into using national-security laws to impose new tariffs – as high as 25% – on imported cars. China made official earlier this week its pledge to lower tariffs on car imports, specifying that they would be cut to 15%, from the current level of 25%.

Trump’s threat follows his use of the same national-security law – Section 232 of the Trade Expansion Act of 1962 – to impose tariffs on steel and aluminum imports. As was the case with the metals tariffs, the possible auto tariffs are seen by some analysts as a negotiating tactic to gain leverage in talks with Canada and Mexico, America’s largest two sources of car imports.

A move by China to further reduce tariffs on imported products may play into the ongoing trade negotiations between Beijing and the Trump administration. The talks, which are slated to continue in June with a trip by Trump administration officials to Beijing, appeared to find a breakthrough last week, during a visit to Washington by a large trade delegation from Beijing.

But the progress was called into question this week by Trump, who played down prospects of a deal amid a domestic political backlash. Lawmakers and pundits from both political parties criticized Trump’s apparent willingness to grant leniency to Chinese telecoms giant ZTE. Softening the penalty placed on ZTE was reportedly a demand from China before trade talks could move forward.