WASHINGTON/BEIJING: China has agreed to ‘reduce and remove’ tariffs below the 40 per cent level that Beijing is currently charging on US-made vehicles, US President Donald Trump said, as a trade war truce between the two countries gathers pace, cheering markets.
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.
In a meeting lasting two and a half hours, the United States agreed not to raise tariffs further on January 1, while China agreed to purchase more agricultural products from US farmers immediately.
The two sides also agreed to begin discussions on how to resolve issues of concern, including intellectual property protection, non-tariff trade barriers and cyber theft.
But the White House also said the existing 10 per cent tariffs on $200 billion worth of Chinese goods would be lifted to 25 per cent if no deal was reached within 90 days, once again setting the clock ticking.
Tweeting on Sunday night, Trump said: “China has agreed to reduce and remove tariffs on cars coming into China from the US Currently the tariff is 40 per cent”. He gave no details.
Chinese regulators did not respond to requests for comment on what would be a potential boon for automakers including Tesla Inc and BMW which manufacture in the United States for export to China.
Neither country had mentioned auto tariffs in their official read-outs of the Trump-Xi meeting.
Speaking in Beijing, Chinese Foreign Ministry spokesman Geng Shuang reiterated comments from the government’s top diplomat State Councillor Wang Yi who said on Saturday the ultimate goal was the lifting of all tariffs.
“The consensus reached by the leaders of our two countries is to halt the imposition of new tariffs and at the same time the two sides’ leaders instructed the economics teams of both sides to intensify talks towards the removal of all tariffs that have been imposed,” Geng told a daily news briefing.
Chinese shares, commodities and the yuan currency surged even as uncertainty remained about the deal.
The benchmark Shanghai Composite index closed 2.6 per cent higher at 2,654.80 points and the blue-chip index jumped 2.8 per cent. Both posted their best daily gains since November 2.
Still, economic analysts cautioned the deal may have only bought some time for more wrangling over deeply divisive trade and policy issue, and said China’s economy will continue to cool regardless under the weight of weakening domestic and local demand. — Reuters
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