China to cut tariffs on U.S. cars

China to cut tariffs on U.S. cars

China to cut tariffs on U.S. cars

China slapped a 25% tariff on US soybean shipments, among other levies, in response to Trump ordering punitive tariffs on Chinese imports to the U.S. In return, China agreed to buy what the White House called a "not yet agreed upon, but very substantial" amount of USA products to help narrow America's gaping trade deficit with China.

"Such differences are unsurprising after a brief dinner (with translation) where each side tends to see and hear what they want", added Chris Krueger, a strategist at Cowen Washington Research Group.

"It's an incredible deal", Trump told reporters aboard Air Force One, adding, "if it happens it goes down as one of the largest deals ever made".

Trump said on Twitter.

The move, if realized, would bolster USA auto manufacturers that were hit hard when China ramped up levies on US-made cars in July as part of a broad package of retaliatory tariffs amid a sprawling trade war between Washington and Beijing.

This news comes on the heels of the announcement by General Motors that they would be closing one manufacturing plant, costing thousands of American jobs. And Beijing agreed to reconsider a takeover by US chipmaker Qualcomm that it had previously blocked.

The United States expects immediate action by China on trade issues after a deal reached by the countries' leaders, including lower tariffs on automobiles and measures against intellectual property theft and forced technology transfers, a White House official said on Monday.

It's another stark demonstration of the contrast between the two leaders on the global stage. "This changes the tone and direction of the bilateral conversation".

The two sides were communicating in the weeks leading up to the G20. Trump also canceled a Saturday news conference, citing respect for the Bush family following the death of former President George H.W. Bush.

As a political scientist following the escalating tensions, I believe that the statements coming out of the G-20 meeting reveal that a wide gap still separates Xi and Trump, both in terms of what matters most to them and their approach to getting it.

There were also differences on China's preferences of United States goods and on the timeline for a trade-deficit reduction. These are front-burner topics on America's list of required Chinese trade changes.

Resolving the tariff war between the USA and China is seen as crucial for American agriculture, particularly soybeans, America's largest export to China, which accounted for $12.4 billion in sales a year ago. Earlier this year, for example, Trump approved a US$330 million arms deal with Taiwan, following up on a previous deal of $1.3 billion.

China has already slapped tariffs on $110 billion in USA goods.

"It is unreasonable to assume that all challenges in the relationship can be resolved in 90 days". Meanwhile, the Xinhua news agency also reported, citing the Chinese Foreign Ministry, that the two countries had agreed to expedite talks toward eliminating all additional tariffs.

US officials insist that the American economy is more resilient to the tumult than China's, but they remain anxious of the economic effects of a prolonged showdown - as Trump has made economic growth the benchmark by which he wants his administration judged.

"This is the first time that we have a commitment from them that this will be a real agreement", Mnuchin told CNBC.

The trade war had been a pall on worldwide markets as the world's two largest economies exchanged rounds of increasingly severe tariffs.

Joining other forecasters, economists at the Organization for Economic Co-operation and Development last week downgraded their outlook for global economic growth next year to 3.5 percent from a previous 3.7 percent.

"This trades one trade uncertainty for another", Diane Swonk, chief economist at Grant Thornton, tweeted. The direct result is that fentanyl has flooded the US market, in turn becoming the primary driver of surging drug overdose deaths.

In return, China is to purchase "very substantial" amounts of agricultural, energy, industrial and other products from the United States.

China nixed the proposed takeover earlier this year, citing antitrust concerns, after USA and European regulators approved the deal.

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