China is lowering tariffs on other countries amid trade war with the US



J.R. Reed | CNBC

The Trump administration’s tariffs have opened the door for U.S. economies allies in China, a study shows, adding to trade-induced headaches for American businesses.

As Beijing has raised duties in response to the Trump administration’s spate of tariffs, it also lowered trade barriers for exporters around the world, according to an analysis by the Peterson Institute for International Economics. Since the start of 2018, Chinese tariffs on U.S. products have jumped to 20.7%. Over that same time frame, China has reduced tariffs on competing products from other WTO countries to an average of only 6.7%.

In 2018 all countries, including the U.S., faced an average 8% tariff in China, according to the Peterson Institute report.

“Trump’s provocations and China’s two-pronged response mean American companies and workers now are at a considerable disadvantage relative to both Chinese firms and firms in third countries,” Chad Brown, a senior fellow at the Peterson Institute, said in the report. “China has begun rolling out the red carpet for the rest of the world. Everyone else is enjoying much improved access to [the country’s] 1.4 billion consumers.”

Put another way, American products have become pricier for Chinese buyers while goods from other countries are less expensive. On average, in China, it is now 14% cheaper to buy something from Canada, Japan, Brazil or Europe than it is to buy from the U.S. While recent reports document how Indonesia, Bangladesh and Vietnam have stepped in to fill the void in American supply chains, the Peterson Institute analysis highlights how Beijing’s own policy shifts have benefited traditional U.S. economic allies.

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