Economy

White House backpedals on Trump's claim that China will drop auto tariffs

White House backpedals on Trump's claim that China will drop auto tariffs”

It also said China had agreed to start buying farm products from United States farmers immediately.

Markets, however, pulled back sharply after Monday's rally as doubts crept in over what could realistically get accomplished in the tight negotiating window.

China's reticence contrasted with the parade of USA officials talking about the deal on Monday, including Treasury Secretary Steven Mnuchin and White House Economic Adviser Larry Kudlow.

While neither of these two energy products were mentioned by name, it's likely that China would not only appease the U.S.by removing tariffs on U.S. LNG imports but would also help itself since Beijing needs the diversity of supply that growing U.S. shale oil and gas exports offer.

China was already hit with $50 billion worth of tariffs earlier this year. The Trump administration has thus far applied tariffs to $253 billion worth of Chinese goods, and has threatened to apply 25 percent tariffs to another $267 billion worth of Chinese merchandise if this round of talks are unsuccessful.

"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".

Confusion has also arisen over when the agreed 90 day period for negotiations will kick in, with some saying it begins now, others claiming it's January. White House economic advisor Larry Kudlow said the figure was a broad benchmark that would depend on private transactions for U.S. goods and was subject to market conditions.

China and the United States agreed on Saturday to a ceasefire in a months-long trade war that has roiled global markets and halted sales of US soybeans to the world's top buyer.

According to the White House, the US will still keep in place $200 billion of tariffs on Chinese imports but will not increase those tariffs from 10 percent to 25 percent after the start of the year as originally planned.

China also agreed to lift tariffs, including reducing its 40-percent tariff on American cars, . which Mnuchin expects will eventually "fall to zero".

Mnuchin cast the weekend dinner as a breakthrough in the trade standoff with China and said there were "very, very specific" items that the two leaders agreed to have incorporated into a broader agreement that has yet to be finalized.

A lack of detail from the Chinese side has left investors and analysts wondering if Mr Trump's exuberance is warranted, and if details touted by the White House but left out of Chinese reporting on the agreement are in question.

The temporary freeze on further hostilities in the trade war between the United States and China had sparked a global rally in equity markets on Monday, pushing MSCI's all-country world index up 1.3 percent.

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

But so far Beijing has resisted confirming commitments made by Xi and announced by the United States.

That was a very different message to the one that emerged immediately after the dinner, when Trump said that he and Xi had agreed on "an incredible deal" and that US-China relations had taken a "big leap forward".



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