Trump says China agrees to ‘reduce and remove’ tariffs on United States cars

Trump says China agrees to ‘reduce and remove’ tariffs on United States cars

Trump says China agrees to ‘reduce and remove’ tariffs on United States cars

Upon the conclusion of the meeting on December 1, the White House press secretary sent out a statement with details about the outcome, chief among them Trump's decision to halt the escalation of the tariff rate on Chinese imports worth $200 billion to 25 percent from 10 percent come January 1.

The United States and China are locked in a dispute over their trade imbalance and Beijing's tech policies.

But in an editorial, the official China Daily warned that while the new "consensus" was a welcome development and gave both sides "breathing space" to resolve their differences, there was no "magic wand" that would allow the grievances to disappear immediately.

Stock markets are rallying worldwide after the USA and China agreed to suspend new tariffs in their trade war to allow for peace talks.

The benchmark Shanghai Composite index led the way with a rise of 2.6% while Hong Kong was up 2.3% and Tokyo 1% better.

"This is a relief rally", said Paul Kitney, chief equity strategist at Daiwa Capital Markets in Hong Kong.

Trump also said he would shortly be providing formal notice to Congress that he will terminate the North American Free Trade Agreement, giving lawmakers six months to approve the replacement he signed Friday. "The existing tariffs are still having a negative impact on the Chinese economy, they haven't gone away".

The White House said that if agreement on trade issues including technology transfer, intellectual property, non-tariff barriers, cyber theft and agriculture has not been reached with China in 90 days, that both parties agree that the 10 percent tariffs will be raised to 25 percent. "People have already started to reconsider their sourcing arrangements", said Larry Sloven, who has been sourcing and manufacturing in China for three decades.

Chinese state media has made only scant mention of the Qualcomm issue, which was not addressed by the Chinese government's top diplomat at a news conference in Buenos Aires on Saturday night. "China's reform and opening-up's broad perspective recognises that the rest of the world does things differently", it said in its editorial.

There was also caution from the US business community.

In a 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.

Any move to reduce or eliminate the extra tariff is a boon for carmakers such as Tesla, BMW and Daimler, which all produce cars in the USA and import to China.

Xinhua also made no mention of China's promises to buy more USA goods, and a detail in the White House statement regarding US chipmaker Qualcomm's failed bid to buy NXP Semiconductor after Chinese regulators failed to approve the deal.

The Chinese have always been willing to buy more U.S. goods, help fight fentanyl abuse and launch trade talks, said Dr Bonnie Glaser, senior adviser for Asia and the director of the China Power Project at the Centre for Strategic and International Studies.

In an August 2018 article by the state-run newspaper Global Times, Yu Haibin, the head of the China National Narcotics Control Commission, reiterated that position and was quoted as saying, "I don't know where the basis for this claim is coming from".

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