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USA and China 'will impose no new tariffs'

03 December, 2018, 22:39 | Author: Melinda Barton
  • Donald Trump hails 'amazing and productive' talks, as US agrees to suspend new China tariffs for 90 days

The price increase sparked a major hit to the roughly $10 billion worth of passenger vehicles the USA sent to China a year ago.

The U.S. will postpone until March 1 a plan to raise tariffs on $200 billion worth of Chinese goods from 10 percent to 25 percent, with Washington set to resume talks with Beijing in hopes of a longer-term deal on trade.

Over the weekend, President Trump of the United States and President Xi Jinping reached a consensus in the ongoing battle between the world's two largest economies over a two and half hour working dinner after hailing their close friendship.

"They agreed to hold off on the imposition of new tariffs and came up with a series of constructive arrangements on how to address the existing differences and problems", spokesman Geng Shuang told reporters.

Trump also talked about reducing arms race between US, China and Russian Federation.

In China, vehicle dealers such as Grand Automotive, Pangda Automobile Trade and Sinomach Automobile climbed on the news, with some local carmakers falling back.

While Beijing retaliated for USA tariff hikes by imposing penalty charges on American soybeans, autos and other goods, it has cut duties on factory machinery and other imports from other countries.

That put US -made car brands like Tesla and Ford Motor Co's Lincoln at a major disadvantage, soon after China slashed auto import tariffs broadly to 15 percent for most vehicles. But imported vehicles only got a small share in the market because more than 85 per cent of the models sold in China are assembled inside the nation through joint ventures. These projects not only need to sign long-term off-take agreements with Chinese entities, but many of them, particularly newcomers not backed by more experienced oil and gas majors, will need Chinese financing to go ahead. China's silence indicates that the two leaders likely discussed the issue and reached a tentative agreement during their dinner meeting.

Asian stock markets opened on a high note on Monday, with Tokyo up by more than one percent and Hong Kong and Shanghai rising more than two percent.


After being spooked by the conflict, investors returned to buying following the long-awaited meeting between the two presidents.

With US-Chinese disagreements on Trump's demands for better market access and intellectual property protections so profound, any real breakthrough was considered unlikely. "China's reform and opening-up's broad perspective recognises that the rest of the world does things differently", it said in a Monday editorial.

The nationalist Global Times tabloid called it a "momentous step forward" that brings "huge potential for fair trade".

The U.S. leader said U.S. farmers "will be a very BIG and FAST beneficiary of our deal with China".

Trump agreed that on January 1, 2019, he will leave the tariffs on United States dollars 200 billion worth of product at the 10 per cent rate, and not raise it to 25 per cent at this time.

So far, the US has imposed tariffs on $250 billion worth of Chinese imports.

German carmaker BMW and Ford's Lincoln brand have also been hit hard by the tariffs with some of their cars made in the United States for the Chinese market.

Mnuchin said the negotiations with China would be led by Trump, with an "inclusive team" of administration officials, including himself and other cabinet officials.

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