The United States on Friday rolled back some of the punitive tariffs it has imposed amid its trade war with China, as an interim trade deal between the two countries took effect the same day.
Based on the "phase one" deal, the United States halved the 15 percent tariff rates imposed on $120 billion of Chinese imports in exchange for Beijing's commitment to purchase substantially more U.S. products and strengthen its intellectual property protections.
The latest development comes as China wrestles with the outbreak of a new coronavirus that has hit economic activity in the country and the region, creating uncertainty as to whether Beijing will be able to buy additional U.S. goods and services to the targeted level.
China has agreed to boost its purchases of U.S. goods and services over the next two years by at least $200 billion, including $32 billion on agriculture alone, in a move that is expected to help the United States reduce its trade deficit with the Asian country.
China has also promised to pursue financial services liberalization, while committing to address allegations of forced technology transfer and currency manipulation to boost exports.
The United States, however, will maintain a tariff rate of 25 percent for approximately $250 billion of Chinese imports -- roughly half the amount China sold to the United States in 2018.
The move means that $370 billion of Chinese goods will continue to be affected by punitive levies imposed by the United States since the tit-for-tat trade war started in July 2018.
China, for its part, has said it will lower tariffs on about $75 billion worth of goods imported from the United States, effective Friday.
The administration of U.S. President Donald Trump sees the agreement as the first part of a bigger trade deal to address longstanding U.S. complaints over China's economic and trade regime.
The truce between the economic giants has been a relief for the world economy, which has been impacted by the escalating tariff war, as well as for the two countries.
But the outbreak of the new coronavirus has emerged as a possible new risk, with production halted at factories in China, supply chains disrupted and travel restrictions imposed. Infections have spread to over 20 countries mainly in Asia, Europe and North America.
Experts have warned of possible economic spillover to the rest of the world, as the Chinese economy now accounts for around 19 percent of the global gross domestic product, according to the International Monetary Fund.