Kudlow: Deal to remove Chinese tariffs on U.S. cars not done yet

Jeannie Matthews
December 8, 2018

"China will start with the implementation of the specific matters in which consensus has been reached, the sooner the better", it said, without providing more details.

Trump tweeted late Sunday that China has also agreed to "reduce and remove" tariffs on imports of American cars.

As the United States and China carry out negotiations to finalise a deal over their economic dispute, Mr Trump has warned China to negotiate a fair deal or else continue to face imposed tariffs. We are merely entering the next phase of what will be an enduring economic competition between the world's two largest economies.

The trade ceasefire is widely viewed by analysts as merely kicking the can down the road in the complex dispute between the two sides. While Asian and European equities dropped Wednesday in the wake of the biggest slide in stocks on Wall Street since the mid-October downdraft, US futures advanced after the statement from China echoed Trump's optimism over bilateral trade talks.

"China right now has major trade barriers-they're major tariffs-and also major non-tariff barriers, which are brutal".

China has said comparatively little about the Trump-Xi agreement after senior Chinese officials briefed the media following the leaders' meeting, and there have been some differences between U.S. and Chinese accounts of what the deal entails. China's government has yet to issue official comment on those details.

In exchange, China offered more than one-point-two trillion dollars in additional commitments on trade.

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But no substantial purchases can happen with a 25 percent duty still in place on US soybeans, corn, sorghum and wheat, said buyers and analysts.

A day after President Trump announced that China had agreed to remove tariffs on U.S. cars, his top economic adviser said a deal had not yet been inked. After this tweet of president Trump, the stock market showed some positive response which indicates that the faith investors are restored at least for a short period.

Last week, BMW said it was considering building a second manufacturing plant in the United States that could produce engines and transmissions, which drew praise from Trump.

But Mnuchin said, "I think there's no question the president's tariff strategy has worked". "China is willing to increase imports in accordance with the needs of its domestic markets and the people's needs, Wang said, "including marketable products from the United States, to gradually ease the imbalance in two-way trade". China gets a delay on additional tariffs, while the US gets greater purchases of agriculture goods while retaining leverage to push for more structural changes to the economy. China has placed a 10 percent tariff on U.S. -LNG imports with the threat of increasing that figure in the future, resulting in China having to find alternate sources of the super-cooled fuel on the spot market.

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 per cent tariffs would go up to 25 per cent.

His appointment of Lighthizer to lead the talks instead of Treasury Secretary Mnuchin puts one of the administration's toughest China critics in charge.

Peter Navarro, the president's top trade adviser, expressed confidence in the president's trade strategy. Most economists noted that the two countries remain far apart on the sharpest areas of disagreement, which include Beijing's subsidies for strategic Chinese industries, in addition to forced technology transfers and intellectual property theft.

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