BEIJING––China said on Sept. 7 it will increase export tax rebates for 397 items ranging from some steel products to electronic ones, in a bid to offset the economic impact of U.S. tariffs amid the trade war between both countries.
The move comes as word is widely awaited on whether U.S. President Donald Trump will impose tariffs on another $200 billion of imports from China. A public consultation period in Washington on the proposal has just ended.
To date, the U.S. has imposed tariffs on $50 billion of Chinese products, and Beijing has reciprocated.
On Sept. 7, Trump also told reporters that he was considering levying tariffs on an additional $267 billion in Chinese imports—on top of the proposed $200 billion.
On the same day in China, the country’s finance ministry said that effective Sept. 15, tax rebate rates for light-emitting diodes (LEDs), lithium batteries, multi-component semiconductors, machinery products, books, and newspapers will be increased to 16 percent.
The ministry, in a statement on its website, did not say what the current rebate levels are on those products. China assesses a 16 percent value-added tax on some exports, so a rebate of 16 percent will mean exporters get back the full amount paid.
“This is in effect to negate the impact from U.S. tariffs,” said Mei Xinyu, a researcher at a think tank affiliated with the Commerce Ministry.
For some other products, the rebate will be increased, but not to 16 percent. According to the statement, China will increase rebates for stainless steel products to 9 percent, and steel pipes to 13 percent. It was not clear immediately what the level of current rebates are.
Rates for chemicals are also being increased, the statement said.
Exports are one of China’s key growth drivers, and any loss of momentum for them will pile more pressure on its already cooling economy.
Last week, China’s State Council said that it decided to increase the rate of export tax rebates for some products to support the economy.
By Stella Qiu & Elias Glenn