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Trump says China will ‘reduce and remove’ tariffs on US car imports

Follows truce reached between two nations during G20 summit in Buenos Aires

Caitlin Morrison
Monday 03 December 2018 13:55 GMT
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Trump has dinner with Chinese President and reaches 90-day 'ceasefire' in trade dispute

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Donald Trump has said China is prepared to cut tariffs on US car imports, sending shares in carmakers up and boosting Chinese dealer stocks.

Mr Trump tweeted: “China has agreed to reduce and remove tariffs on cars coming into China from the US. Currently the tariff is 40 per cent.”

He provided no details about when the reduction would be applied, or what the new levies would be, and Beijing has yet to comment on the arrangement.

The US leader met his Chinese counterpart, Xi Jinping at the G20 summit in Argentina over the weekend, where they agreed to halt new tariffs following months of escalating trade tensions.

Over a two and a half hour dinner, Mr Xi agreed to resume purchases of US farm and energy commodities, while Mr Trump said he would postpone an increase in tariffs on $200bn (£157bn) worth of Chinese imports.

The two countries also agreed to negotiate Chinese policies on intellectual property over the next 90 days.

However, some commentators warned that it may be difficult for China to stick to its promises.

Bart Hordijk, market analyst at Monex Europe, said: “Looking forward, we estimate that trade tensions may diminish on the short run after this truce was struck, but will increase again as the deadline for China to show the required improvements approaches in three months’ time.

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“This is because it seems unlikely that China will be able to adhere to all the demands, like importing more US agricultural goods, as there is simply not enough demand for those products in China.

“Also, the Chinese have it as a goal to become (or, indeed, stay) a global leader in the tech sphere and will therefore not easily give up its policies that help it to acquire the intellectual property it needs for this. It may even be willing to sacrifice some trade benefits for this.”

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