Published: Wed, December 05, 2018
Markets | By Jeffery Armstrong

Trump's China vehicle tariffs claim sows confusion

Trump's China vehicle tariffs claim sows confusion

The White House's official statement says nothing of the sort; it only says the US will hold negotiations with China on the latter's "forced technology transfer, intellectual property protection, non-tariff barriers, cyber intrusions and cyber theft, services and agriculture".

President Donald Trump announced that China agreed to reduce and remove tariffs on imported cars on Sunday.

With the pause in place, . the 90-day period begins on January 1st, . with the two countries expected to continue talks throughout that period.

The commerce ministry is due to hold its weekly news briefing on Thursday.

A lack of detail from the Chinese side has left investors and analysts wondering if Mr Trump's exuberance is warranted, and if details touted by the White House but left out of Chinese reporting on the agreement are in question. Chinese officials, meanwhile, did not confirm any of these details. The fact that China made no mention of agriculture in its statement after the meeting may also increase trader concerns over whether these purchases will materialize. China has placed a 10 percent tariff on U.S. -LNG imports with the threat of increasing that figure in the future, resulting in China having to find alternate sources of the super-cooled fuel on the spot market. Targeting soybeans was widely seen as a direct attack on Trump's supporters, as the US' top soybean farming states voted for Trump in 2016.

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U.S. Representative Steve King, an Iowa Republican, in February 2017 introduced a bill that would have allowed the U.S. government to punish Chinese intellectual property theft by imposing duties on the country's imports.

Mnuchin also stressed the USA expects immediate action from China on its trade commitments.

Otherwise, China - which has been incredibly protective of its own domestic auto industry, and probably doesn't want competition from other countries - could create a special tariff line in its itemized tariff system, meaning it would invent a new line that would only specifically apply to autos produced in the U.S.

"Both parties agree that they will endeavor to have this transaction completed within the next 90 days".

Behind Beijing's apparent caution may also be a whiff of fear that the truce might not last, said Andrew Gilholm, of the consultancy Control Risks.

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However, a brokerage report speculated that a three-percent jump in Chinese stocks on Monday was partly stoked by enthusiasm based on optimistic but vague reporting in Chinese newspapers.

China will need to drop steep tariffs it imposed on a range of American farm products earlier this year before it can fulfill its pledge to buy substantial volumes of USA goods, said Chinese traders on Monday.

That may reflect differences in political culture more than anything, said Luwei Rose Luqiu, a journalism professor at Hong Kong Baptist University.

White House national security adviser John Bolton told The Wall Street Journal's CEO Council meeting on Tuesday that Chinese theft of U.S. intellectual property was among the administration's top concerns.

On Monday, influential Chinese tabloid the Global Times said it understood China and the United States will further discuss moves at expanding market access, intellectual property protection, avoiding compulsory technology transfers, and joint control of cyber crime.

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"There's a specific understanding that we're going to now turn the agreement the presidents have into a real agreement over the 90 days", Mnuchin told reporters during a gaggle outside the West Wing, while the president was busy tweeting on the topic and said he has a "very strong and personal relationship" with President Xi.

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