Sceptics doubtful of trade breakthrough amid China-US truce

06 December, 2018, 16:29 | Author: Wade Massey
  • A woman walks past an electronic board showing Hong Kong share index outside a local bank in Hong Kong Wednesday Dec. 5 2018. Shares were moderatel

Trump and Xi on Saturday agreed to the cease-fire in a trade war that has seen the flow of hundreds of billions of dollars worth of goods between the world's two largest economies disrupted by tariffs.

The ministry said that China would try to work quickly to implement specific items already agreed upon, as both sides "actively promote the work of negotiations within 90 days in accordance with a clear timetable and road map".

The ministry's statement came after the USA president, Donald Trump, called himself "a Tariff Man" on Twitter and warned more levies could be imposed on China. "Unless extended, they will end 90 days from the date of our wonderful and very warm dinner with President Xi in Argentina", Trump tweeted.

During the talks in Buenos Aires, Trump agreed to delay a scheduled escalation in United States tariffs on many Chinese goods, from 10 per cent to 25 per cent, that had been set to take effect on January 1. "But if not remember, I am a Tariff Man".

Mr Trump has said China is supposed to start buying agricultural products immediately and cut its 40 per cent tariffs on USA vehicle imports.

But Asia failed to follow the lead to the same extent after China gave its first official comments on the temporary trade truce which allowed for tariff hikes to be postponed for 90 days- until 1 April.

"Free trade has made the success story of BMW in the USA possible", the company said in a statement Tuesday, adding that 70 percent of the cars made in Spartanburg past year were exported to more than 120 countries.

Meanwhile, White House National Economic Council Director Larry Kudlow said there wasn't an actual agreement for China to remove auto tariffs, but that he expected China to eventually do it as a measure of good faith.

China vowed yesterday to move swiftly to strike a trade consensus with the United States, even as mixed signals on the detente from self-described "Tariff Man" Donald Trump's administration upset global markets.

"When people or countries come in to raid the great wealth of our Nation, I want them to pay for the privilege of doing so. ALL subjects discussed!" Trump said on Twitter.

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Instead, the two sides are to negotiate over U.S. complaints about China's trade practices, notably that it has used predatory tactics to try to achieve supremacy in technology.

"There are strong views in Japan that if China is honest about rapprochement with Japan, while respecting relevant World Trade Organisation rules based on scientific evidence, China should significantly speed up the process towards lifting the restrictions against Japanese goods and products", the source said.

Megan Greene, chief economist at Manulife, said the market's recent decline had likely contributed to Trump's willingness to reach a truce.

"But if a fair deal is able to be made with China, one that does all of the many things we know must be finally done, I will happily sign".

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 the two sides' accounts of what the deal entails.

The tone of Trump's latest tweets show an apparent shift from 24 hours earlier, when he was unreservedly triumphant, saying relations with China had taken a "BIG leap forward".

A Chinese official told Reuters that officials were "waiting for the leaders to return" before publicizing details.

One of the few automotive stocks to score a gain on Tuesday was Tesla which only recently began work on a new factory in Shanghai that eventually will let it sidestep the tariff battle.

Furthermore, Kudlow seemed to downplay Trump's assertion following the meeting that China agreed to reduce or eliminate its tariffs on American automobiles, telling reporters that there was no "specific" agreement reached.

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