Published: Sat, December 08, 2018
Markets | By Jeffery Armstrong

President says China will reduce automotive tariff

President says China will reduce automotive tariff

China has agreed to start purchasing agricultural product from our farmers immediately, " White House stated on Saturday, followed by a tense trade talk between Trump and Xi Jinping on the Saturday night.

During the talks in Buenos Aires, Trump agreed to delay a scheduled escalation in USA tariffs on many Chinese goods, from 10 percent to 25 percent, that had been set to take effect January 1.

The stock market will be closed on Wednesday, during President H.W. Bush's funeral.

Those remarks were echoed by President Trump himself, . who noted his good personal relationship with his Chinese counterpart Xi Jinping in a tweet on Monday. "Unless extended, they will end 90 days from the date of our wonderful and very warm dinner with President Xi in Argentina", Trump said on Twitter.

White House economic adviser Larry Kudlow said earlier this week the USA won Chinese commitments to buy more than $1 trillion in American products. China gets a delay on additional tariffs, while the USA gets greater purchases of agriculture goods while retaining leverage to push for more structural changes to the economy.

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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.

Presidents Trump and Jinping of China met at the G-20 summit over the weekend and agreed to a cease-fire, lasting for at least 90 days, to allow time to smooth out a dispute over Chinese technology policies that the USA and other trading partners consider predatory.

Trump tweeted late Sunday that China has also agreed to "reduce and remove" tariffs on imports of American cars.

"I am a Tariff Man", the president said Tuesday in one of a series of tweets about a new round of trade talks with China after the world's two largest economies imposed tit-for-tat tariffs on hundreds of billions of dollars of each other's goods after Trump struck first.

The two sides will also begin talks on "structural changes" affecting forced technology transfer, intellectual property protection, cyber intrusions and cyber theft, services and agriculture, according to the White House.

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"There was a significant commitment from both leaders on what needs to be done over the 90 days and instructions to both teams to negotiate and turn this into a real agreement with specific action items, deliverables and time frames", Mnuchin said.

"President Xi and I want this deal to happen, and it probably will", Trump wrote on Twitter.

Kudlow said he did not think that auto tariffs were imminent, though he added that they were in Trump's "quiver of arrows".

The deal means the U.S.is unlikely to match China's 40-percent duties on light vehicles built in the USA, a move the American government has considered in recent weeks.

White House economic adviser Larry Kudlow, Commerce Secretary Wilbur Ross and US Trade Representative Robert Lighthizer are among those preparing to attend the White House meeting. There was no Chinese confirmation of the move, which would have little impact on trade because most American vehicles sold in China are made here. Trump is relying on tariffs, and the threat of imposing them, to force other countries to buy more goods from America.

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