The tariff cut will decrease inflationary pressures on Chinese consumers and help to build relationships with non-American suppliers.
China has been angered this week alone by the imposition of new US tariffs on Chinese imports as well as a planned arms sale to democratic Taiwan, claimed by Beijing as sacred Chinese territory.
Duties on textiles, construction equipment, and more than 1,500 other goods will drop on November 1, according to the Chinese government.
The Trump administration and China's government have imposed taxes on a big chunk of each side's products in an escalation of a trade war between the world's two biggest economies.
All indications have pointed to a protracted trade war, as China canceled talks following President Donald Trump's latest round of tariffs and the U.S. is already threatening another round of restrictions.More news: New Star Wars Resistance teaser has more Captain Phasma, Poe Dameron
But Wednesday's move also shows that Beijing is also trying to tweak economic conditions in the country to weather a protracted fight, said Edward Alden, a senior fellow at the Council on Foreign Relations.
Chinese leaders have announced changes this year including tariff cuts and plans to end ownership limits in their auto industry.
On Monday, the Trump administration made good on its threat to apply 10 percent tariffs to 5,745 Chinese imports - from fire alarms to Christmas-tree lights - that are worth about $200 billion a year.
Essentially cutting tariffs for non-US goods will act as a release valve for some of the pressure from the trade war.
"He may not be a friend of mine any more, but I think he probably respects me", said Mr Trump. They ran a scenario in which the United States slaps a 10 per cent tariff on all imports and all trade partners respond in kind. Combined, the tariffs now cover almost half the goods and services China sells America and almost 60 percent of what the United States sells China.
Also this week, US B-52 bombers flew over the disputed South China Sea and East China Sea and Beijing slammed USA plans to sell military parts to self-governing Taiwan.More news: Jefferson Airplane Co-Founder Marty Balin Passes Away at 76
"It happens that we have three huge assets that China doesn't have, and is unlikely to acquire them anytime soon", he wrote.
Beijing and Washington are locked in an increasingly bitter trade war and are increasingly at odds over other issues, such as USA support for self-ruled Taiwan which China claims, and US sanctions on China's military for buying Russian weapons.
In July, China halved import tariffs on 1,500 consumer products, ranging from apparel and cosmetics to home appliances.
The overall tariff level will be reduced to 7.5 percent in 2018 from 9.8 percent in 2017 as a result, the state cabinet said.
The report gave no indication of possible Chinese concessions or room for compromise.
"The most important barriers to imports and foreign investment are non-tariff barriers", Kennedy said. "No one should see this announcement as a turn away from industrial policy and the dominant focus on supporting domestic Chinese companies".More news: Cristiano Ronaldo threatens legal action over rape allegations