Trump announces Chinese rollback of auto tariffs

Trump announces Chinese rollback of auto tariffs

Trump and Chinese President Xi Jinping agreed to hold off on new tariffs during talks in Argentina on Saturday, declaring a truce following months of escalating tensions on trade and other issues. China responded with tariffs of its own on various USA exports.

The U.S. imposes a 27.5-percent tax on imported cars and light trucks from China.

U.S. Trade Representative Robert Lighthizer said last week he was examining all available tools to raise U.S. tariffs on Chinese vehicles to the 40 percent that China was charging on U.S. -produced vehicles.

Mnuchin, in an interview with CNBC on Monday, put a US$1.2 trillion price tag on China's additional trade commitments, but emphasized the details of how they get there still need to be negotiated.

Specifically, China highlighted that the two leaders plan to visit each other's countries at some point and that both sides would work toward scrapping all tariffs to reach a mutually beneficial, win-win agreement.

Trump agreed that on January 1, 2019, he will leave the tariffs on United States dollars 200 billion worth of product at the 10 per cent rate, and not raise it to 25 per cent at this time.

Beijing cut import duties on foreign autos to 15 percent in July but added a 25 percent penalty for US -made vehicles the following month in response to Trump's tariff hikes.

Had a deal not been struck, tariffs on US$200bn worth of Chinese goods would have risen from 10% to 25% at the start of 2019.

"It's an incredible deal".

True to form, Trump hailed the agreement as "one of the largest deals ever made", adding "it will have an incredibly positive impact on farming, meaning agriculture, industrial products, computers, every type of product".

He said for the first time there was "a clear path" to reduce the USA trade deficit with China to zero. "China will be getting rid of many of them".

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The Republican president called their agreement - which Washington hopes will help close a yawning trade gap with the Asian giant and help protect United States intellectual property - an "incredible" deal.

The Auto Care Association also was encouraged by the news.

"We make the finest and cleanest product in the World, and that is what China wants", he wrote on Twitter.

"What he's saying to his own people has more long-term validity than what he's saying to Trump over dinner for the sake of everyone saving face", Khanna said. If an agreement isn't reached by the end of the period, current 10% tariffs on $US200 billion Chinese imports will jump to 25%, the White House said. "But it is not a ceasefire as some already are touting".

It would also be good news for Tesla, which has been hit hard by increased tariffs on the electric cars it imports to China.

USA officials will monitor Chinese progress on enforcing the commitments very closely, Kudlow said. "China relations that both sides claim victory", said Michael Pillsbury, a senior fellow at the Hudson Institute and a defense official under presidents including Ronald Reagan and George W. Bush. "Both sides avoided the worst-case scenario".

The meeting ran longer than scheduled, ending after more than two hours.

President Trump and Xi Jinping have now agreed to a temporary truce in the bitter dispute.

With the United States and China clashing over commerce, financial markets will take their lead from the results of the talks, "widely seen as the most important meeting of U.S. and Chinese leaders in years", says the news agency.

Of China's US$51 billion of vehicle imports in 2017, about US$13.5 billion came from North America, including sales of models made there by non-U.S. manufacturers like BMW.

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