China Set To Halve Tariffs On $75 Billion Of U.S. Goods

China announced on Thursday that it would uphold its first part of the recently signed phase one trade deal with the U.S. by halving tariffs on $75 billion worth of American goods, as both sides continue to de-escalate the years-long trade war that has weighed on global economic growth.

The tariff rollbacks from China come in response to the U.S. earlier deciding to slash tariffs in half on some $120 billion worth of Chinese goods—from 15% to 7.5%—as part of the truce under the phase one trade deal.

China’s Ministry of Finance said that it would essentially halve the tariffs it placed on 1,717 goods it imports from the U.S. back in September, including American cars, crude oil, soybean and other goods. The retaliatory tariffs on some U.S. goods will be cut from 10% to 5%, while the levy on others will be slashed from 5% to 2.5%.

With the tariff cuts set to go into effect on February 14, Chinese officials also said on Thursday that they still hope to work with the U.S. to completely eliminate tariffs enacted by both sides.

The phase one trade deal, while marking a truce in the long-running trade war, still left in place most tariffs, including the original levies on $360 billion worth of Chinese-made goods that the Trump administration began enacting in 2018. Chinese tariffs also still remain on some $35 billion worth of U.S. goods.

The most crucial part of the phase one trade deal for the U.S., however, is China’s pledge to buy an additional $200 billion of U.S. goods over the next two years, including manufactured goods, food, farm products, energy and services.

Such a large increase in Chinese imports of U.S. goods has raised some skepticism on Wall Street, especially as China now struggles to contain the escalating coronavirus outbreak, which as of Thursday has infected more than 28,000 people and killed 565.

Treasury Secretary Steven Mnuchin told Fox Business in an interview on Thursday that based on current projections, the U.S. does not expect the coronavirus to hinder China’s ability to live up to their end of the phase one trade deal. “Based on current information, I don’t expect there will be any issues in them fulfilling their commitments,” he said.

Stocks rose on the news Thursday morning, with all three major indexes looking set to post a fourth straight day of gains. The Dow and S&P 500 both rose by 0.2%, while the Nasdaq was up 0.1%.