China vows quick action on U.S. trade promises: 'The sooner the better'

Ann Santiago
December 8, 2018

Top executives of Volkswagen AG and Daimler AG are set to meet senior Trump administration officials today, the White House said, as the United States considers slapping tariffs on European-made cars.

On Monday, Trump tweeted that China had agreed to remove tariffs on American autos, but White House aides struggled to explain specifics about the deal, according to the Associated Press.

As part of the agreement, Trump - who called the deal "incredible" - said that he'll delay the United States' plan to impose tariffs on $200 billion in Chinese goods. USA markets were closed on Wednesday to observe former President George H.W. Bush's death, but the effect of Wall Street's turmoil the previous day was felt in Europe and Asia with the benchmark Shanghai stock index closing down 0.6 percent.

Trump didn't help when he tweeted 'I am a tariff man, ' which investors saw a sign a deal may not happen.

White House economic adviser Larry Kudlow said earlier this week the US won Chinese commitments to buy more than $1 trillion in American products. He said China discussed up to $1.2 trillion in commitments that could potentially help reduce the US trade deficit.

China's official statement on weekend trade talks with the US was very light on details, but in the ensuing days, some of the country's state-run media outlets have reported details from the summit and referred to information the government has tried to censor.

Trump and Xi agreed on a trade war truce on the sidelines of a G20 summit in Argentina on Saturday, holding off on new tariffs and giving negotiators 90 days to reach an agreement.

"We expect those tariffs to fall to zero", he told reporters. 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. "And it'll have an incredibly positive impact on farming, meaning agriculture, industrial products, computers - every type of product".

The agreement by President Donald Trump and his Chinese counterpart Xi Jinping on a cease fire on tariffs postpones the threat of more disruption for China's exporters and their Asian suppliers.

The director of the National Economic Council, Larry Kudlow, meanwhile said that an agreement Trump said he had secured from China to reduce or eliminate tariffs on USA -made cars isn't final, backtracking from Trump's announcement just two days earlier.

Trump applauded the news in a tweet.

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

Beijing's decision to keep things vague, for now, may reflect a desire to avoid being seen as having capitulated under pressure - the sides have 90 days to reach a deal - or may be a hedge against Trump's unpredictability, analysts said.

Height Capital Markets analyst Clayton Allen said positive language from Trump without any firm commitments from China is almost identical to the results from Trump's July meeting with European Commission President Jean-Claude Juncker.

In exchange, China offered more than one-point-two trillion dollars in additional commitments on trade. -China trade cease-fire, contributing to a broad stock market plunge and intensifying fears of a global economic slowdown. "We don't have a specific agreement on that", he said.

"Very strong signals being sent by China once they returned home from their long trip, including stops, from Argentina", he wrote.

Kudlow said he did not think that auto tariffs were imminent, though he added that they were in Trump's "quiver of arrows".

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