China agrees to ‘reduce and remove’ tariffs on USA cars: Donald Trump

China agrees to ‘reduce and remove’ tariffs on USA cars: Donald Trump

WASHINGTON: China has agreed to scale back tariffs on imported United States of America (USA) cars, President Donald Trump said Sunday, one day after agreeing with Xi Jinping to a ceasefire in the trade war between the world’s top two economies.nnAsia stocks had rallied on the news that Washington and Beijing would not impose any new tariffs during a three-month grace period, during which the two sides are meant to finalise a more detailed agreement.nn”China has agreed to reduce and remove tariffs on cars coming into China from the U.S. Currently the tariff is 40 per cent,” Trump said on Twitter.nnOn Saturday, Trump and Xi agreed to put a stop to their tit-for-tat tariffs row, which had roiled world markets for months.nnThe Republican president called their agreement — which Washington hopes will help close a yawning trade gap with the Asian giant and help protect US intellectual property — an “incredible” deal.nnTrump agreed to hold off on his threat to slap 25 per cent tariffs on USD 200 billion worth of Chinese goods from January 1, leaving them at the current 10 per cent rate.nnIn return, China is to purchase “very substantial” amount of agricultural, energy, industrial and other product from the US The US president did not send any subsequent tweets Sunday explaining which auto tariffs would be removed, and which would be reduced.nnIn July, China reduced auto import duties from 25 per cent to 15 per cent, a boon for international carmakers keen to grow sales in the world’s largest auto market.nnBut as trade tensions ratcheted up with the US this summer, Beijing retaliated by slapping vehicles imported from the US with an extra 25 per cent tariff, bringing the total tariff rate to 40 per cent.nnMany US automakers build their cars in China, but for some the tariff hikes have hit sales.nnUS company Tesla saw its sales drop with the higher prices this fall and recently said it would absorb some of the higher tariff costs and no longer pass them on to consumers.nnGerman carmaker BMW and Ford’s Lincoln brand have also been hit hard by the tariffs with some of their cars made in the US for the Chinese market.nnThe news comes as Trump mulls a tariff hike on vehicles imported from the European Union.nnTop executives from German carmakers Volkswagen, Daimler and BMW are to meet Tuesday with senior US officials at the White House to discuss the situation, the German news agency DPA reported, citing unnamed sources.nnSource: AFP/ Press Trust of India

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