China on Thursday announced that it will halve tariffs on hundreds of U.S. goods worth about $75 billion.
Retaliatory tariffs on some U.S. goods will be cut from 10% to 5%, and from 5% to 2.5% on others, according to a statement from China's Ministry of Finance. The adjustments will take effect from 1:01 p.m on Feb. 14, it said, without specifying which time zone it was referring to.
The cuts apply to about $75 billion worth of imports from the U.S. that was slapped with tariffs on Sept. 1, 2019, according to a separate statement on the ministry's website.
After the cut, duties on U.S. crude will be reduced to 2.5%, from 5%, and the tariff on soybeans will be trimmed by 2.5%.
The statement on the Ministry of Finance website said the move was made in order to "advance the healthy and stable development of China-U.S. trade." A separate article on the website noted the cut in tariffs was timed in conjunction with a U.S. decision in January to halve tariffs on Feb. 14 for $120 billion of Chinese goods — from 15% to 7.5%.
China said that the next adjustment will depend on how Sino-U.S. trade ties evolve, adding it hopes to work with Washington to completely eliminate all tariff increases.
China and the U.S. have imposed punitive tariffs on billions of dollars worth of each other's goods in their trade battle which started more than a year ago. However, both countries reached a so-called phase one trade agreement in January, which helped avert further escalation to the trade war.
Markets rallied after the news. Mainland Chinese stocks surged by as high as more than 2%, as did Hong Kong markets. Japan shares rose nearly 3%.
The Chinese yuan strengthened, with offshore last strengthening to 6.9652, and the onshore yuan last at 6.9648.
One analyst says this development could be a sign that China is ready to move on beyond the so-called phase-one trade agreement.
"Who knows the exact motivations, I mean that's quite plausible, that they're under (economic) pressure. But I think the development is very welcome because you know, that language suggests that there is a bit of an olive branch here. And a bit of a desire to move forward beyond the phase one and possibly take on phase two," said Kingsley Jones, chief investment officer at Jevons Global.
"I think that would be good ... if we can get these tariff barriers lowered, and get a normalization of relations that also includes some negotiation about those other sticking points, you know the IP and so on. Then I think that's very positive," he said.
Separately, Beijing on Saturday said it would suspend retaliatory tariffs on products from the United States that can be used to combat the coronavirus outbreak in China.
Under the phase-one agreement, the Trump administration scrapped tariffs initially set to take effect last December. It also agreed to cut duties on $120 billion in products to 7.5%.
Still, the White House has said it will leave tariffs on another $250 billion in Chinese products in place for now. On Wednesday, Treasury Secretary Steven Mnuchin said a second phase of the agreement that the U.S. hopes to strike could include more tariff relief.
— CNBC's Abigail Ng and Jacob Pramuk contributed to this report.