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Trump Holds out Possible Extension on 90-day China Trade Truce

05 December, 2018, 04:30 | Author: Sara Gill
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President Donald Trump announced that China agreed to reduce and remove tariffs on imported cars on Sunday.

President Donald Trump on Tuesday held out the possibility of an extension of the 90-day trade truce he and Chinese President Xi Jinping agreed on over the weekend that would freeze tariffs while a broader deal is negotiated. Auto tariffs will be discussed right away in follow-up talks, Kudlow said.

His comments relate to the 40% tariff China imposes on USA vehicle imports, which were brought in as part of the trade battle in July.

As tit-for-tat trade tariffs ratcheted up between the nations this year, China slapped retaliatory duties on USA soybeans, pork and a host of other agricultural goods.

But any such pact is not a guarantee, given deep divisions that remain between the countries and the administration's insistence that China end its practice of pressuring US companies to hand over valuable technology and trade secrets.

Trump declared himself Tuesday "a Tariff Man" who wants "people or countries" with intentions to "raid the great wealth" of the U.S. "China trade truce because China has agreed to start buying agricultural products from American farmers immediately", said Monica Tu, an analyst at researcher Shanghai JC Intelligence Co. Trump jolted vehicle stocks by announcing late Sunday that a deal had been reached.

"Every time we covered this kind of bilateral meeting we had no detailed information from the Chinese side", she said, adding that Chinese media were only allowed to publish the reports of state news agency Xinhua. Even before the Buenos Aires talks, Trump last month had stated incorrectly that the Chinese government "got rid of" the Made-in-China 2025 programme of subsidised technology development in response to his objections. If talks fail, the tariff rate on $200 billion of the original $253 billion worth of goods will be hiked from 10 percent to 25 percent.


The White House said talks would take place to resolve within the next 90 days specific U.S. complaints such as forced technology transfer, or else existing 10 percent tariffs would go up to 25 percent.

"Both parties agree that they will endeavor to have this transaction completed within the next 90 days". At the end of the day, two realities remain: the U.S.is now an energy (oil and gas) producing super power alongside the ranks of Russian Federation and Saudi Arabia, while China, conversely, is the world's largest energy consumer, which gives it less leverage in ongoing trade and even geopolitical negotiations and developments.

Another significant take-away from the preliminary agreement could be its impact on energy markets, both USA oil import to China and perhaps even more importantly from a development perspective liquefied natural gas (LNG) imports.

The warning comes days after Trump and Xi reached a preliminary agreement to delay the further escalation of the US-China trade war.

"However I will give it to him that he has managed to bring China to the table", said Guajardo, who is now a senior director at Washington-based McLarty Associates focusing on worldwide trade.

Otherwise, China - which has been incredibly protective of its own domestic auto industry, and probably doesn't want competition from other countries - could create a special tariff line in its itemized tariff system, meaning it would invent a new line that would only specifically apply to autos produced in the U.S.

Confusion has also arisen over when the agreed 90 day period for negotiations will kick in, with some saying it begins now, others claiming it's January.

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