Starting on January 1, 2020, China plans to cut import taxes on some 850 products that are in short supply in the country, including frozen pork and avocados. The move will lower tariffs to 8 percent on the listed items, instead of the 12 percent tariffs that are currently in place and are already considered low. 12 percent tariffs are what’s commonly offered under most-favored-nation status, which is the term used to describe a good trade relationship between countries. China lowered its tariffs on “only” 706 products in 2019.
The goal of the lowered tariffs is to fill the gaps in the Chinese economy, specifically where there are shortages, such as in the case of pork, where African swine flu has decimated the local pig population. China’s economy has expanded recently at its slowest rate in nearly 30 years and could remain under pressure in 2020 due to global economic concerns and open-ended issues relating to the U.S.-Sino trade war.
Asian markets were mostly lower on Monday morning after hitting near 18-month highs. A positive close on Wall Street on Friday did little to boost Asian trader morale or to propel markets higher. On Friday, the S&P 500 closed up for the seventh consecutive trading session, its longest winning streak in over two years. Japan’s Nikkei 225 was up a slight 0.02 percent, the only major index to be trading in the green as of 3:52 p.m. HK/SIN. China’s benchmarks saw the steepest declines, with the Shanghai Composite down 1.40 percent and the Shenzhen Composite down 1.92 percent.
The currency markets saw little volatility during Wednesday’s Asian session as the end-of-year slowdown has already begun. The dollar was moderately lower, trading down against most of its major trading partners. The greenback eased 0.07 percent against the yen to 109.36, and it slumped against the British pound as well, which is starting to recoup the losses suffered last week on fears of a hard Brexit in 2020. The pound gained 0.08 percent against the dollar to trade at $1.3012. The euro was up 0.03 percent against the greenback to $1.108. The dollar did manage to squeeze out some gains against the Canadian dollar, trading up 0.05 percent to $1.3153.