Trump says China to cut car tariffs in trade truce

Thursday, 06 Dec, 2018

Before Trump met his Chinese counterpart, Xi Jinping, the USA had been scheduled to increase tariffs on $200 billion of Chinese goods from 10 percent to 25 percent on January 1. The two leaders, who were in Buenos Aires for a summit of the G20 countries, called it a highly successful meeting.

Beyond the staying of further tariff implementation, the second most important outcome of the G20 encounter is that we're now entering another period of protracted uncertainty.

In another long-sought concession to the U.S., China agreed to label fentanyl, the deadly synthetic opioid responsible for tens of thousands of American drug deaths annually, as a controlled substance.

Although the US and China agreed to halt the trade war, it wasn't immediately clear whether they had made any progress on the issues that caused it.

Earlier this year, the Trump administration imposed new tariffs on almost $250 billion worth of Chinese goods, to force Beijing to end its unfair practices.

Kudlow added that Chinese negotiators told the United States they would move "immediately" to remove tariff and non-tariff barriers without offering specifics on what sectors would be affected, but said he believed it would be tied to automobiles. Now, these tariffs will not be increased for 90 days, that is, until March 1, 2019.

Trump tweeted that China had agreed to "reduce and remove" tariffs of 40 percent on cars, though Beijing has yet to confirm the move.

The two-and-a-half-hour dinner shared by Xi Jinping and Donald Trump in Argentina, where they repeatedly emphasized their great friendship, has ended with an apparent "trade truce" but no immediate tangible results or declaration. "I believe Trump wants all this to be settled and avoid any possible impact on his chances in future elections", he said.

Trump's surprise announcement comes a day after he and Chinese President Xi Jinping agreed to suspend any new tariffs and give negotiators 90 days to strike a deal.

That's precisely why China's statement highlighted Trump's apparent commitment to continue respecting the so-called one China policy - something not mentioned by the Americans.

In July, Qualcomm - world's biggest smartphone-chip maker - walked away from a $44 billion deal to buy NXP Semiconductors after failing to secure Chinese regulatory approval, becoming a high-profile victim of the Sino-US trade dispute.

On the U.S. side at the dinner, Trump was accompanied by advisers such as Larry Kudlow and Treasury Secretary Steven Mnuchin, who are widely seen as wanting a deal. Qualcomm scrapped its US$44 billion plan to purchase NXP after failing to acquire approval from China's State Administration of Market Regulation, which oversees anti-monopoly regulations.

However "we remain skeptical of a substantial trade deal between the two economic giants". "What I'd be doing is holding back on tariffs".

'This was an awesome and productive meeting with unlimited possibilities for both the United States and China.

"While the Xi-Trump dinner has clearly improved the tone of the U.S".

"Trump's latest tweets this morning, which touted the benefits of the agreement for USA farmers and his own prowess as a dealmaker, suggest he will be reluctant to walk away from negotiations for a second time", he said.