China To Exempt Taxes For Certain U.S. Products To Win Fight Against “Devil Virus”

Saturday, February 1, 2020
By Paul Martin

by Tyler Durden
Sat, 02/01/2020

The Ministry of Finance of the People’s Republic of China published a statement Saturday, reviewed by Reuters, noting that tax exemptions for imported products from the U.S. will be enacted to help the country combat the deadly outbreak of coronavirus.

According to the statement, all products that will be tax-exempt must be directly for the use of “epidemic control” and will be exempt from import tariffs through the end of March.

Some of these products include 3M face masks, Ford or Chevy ambulances and disinfectant products.

There was no mention by the finance ministry whether Beijing would continue to honor the phase one trade deal signed with the U.S. last month.

In three weeks’ time from the signing of the trade agreement, two-thirds of China’s economy has virtually ground to a halt, major manufacturing hubs have been shuttered, more than 50 million people are quarantined, and transportation networks across the country have come to a standstill.

About 12,000 cases of coronavirus have so far been reported in China (as of Friday night), with 259 deaths, along with a new report from Hong Kong scientists that estimate at least 75,000 people in Wuhan might be infected.

China accounts for 17% of global GDP, up from 4% in 2003, with much of the world’s supply chains are deeply rooted in the country and are currently shutdown. Growth perspectives for China and the world are plunging, the bond market and commodities say so, which means demand for products from the U.S. will decline, this makes it hard for China to meet hard targets of the phase one trade agreement.

So about that $200 billion in goods, China has to buy from the U.S…

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