China will roll back tariffs on US-made cars, US President Donald Trump said, unveiling another potential breakthrough in a trade war truce that cheered stock markets on Monday.
Trump’s surprise announcement late Sunday came a day after he and Chinese President Xi Jinping agreed to suspend any new tariffs and give negotiators 90 days to strike a deal.
The ceasefire follows months of tensions and tit-for-tat custom duties on hundreds of billions of dollars worth of goods that raised fears of an escalation harmful to the global economy.
Both sides gained from hitting the pause button, with Trump securing a Chinese pledge to import more US goods and Xi staving off the further pressure that higher tariffs would place on his country’s slowing economy.
Trump tweeted that China had agreed to “reduce and remove” tariffs of 40 percent on cars, though Beijing has yet to confirm the move.
China’s foreign ministry declined to confirm Trump’s assertion on Monday, instead saying: “On December 1 President Xi and President Trump reached an important consensus on trade issues.”
US President Donald Trump and Chinese leader Xi Jinping met on sidelines of a G20 summit in Argentina at the weekend
“They agreed to hold off on the imposition of new tariffs and came up with a series of constructive arrangements on how to address the existing differences and problems,” spokesman Geng Shuang told reporters.
Trump’s tweet did not explain which tariffs would be reduced or removed, or when China would act.
Beijing had reduced auto import duties from 25 percent to 15 percent in July. But it later added a 25 percent tariff on US made cars as trade tensions soared, bringing them to 40 percent.
Many US automakers build their cars in China for the local market, but for some the tariff hikes have hit sales, including electric car-maker Tesla and US-made models from BMW and Ford.
One expert said China would have to address US complaints about China’s forced transfer of intellectual property rights — a major issue at the core of a US “301” trade investigation — for Washington to drop its tariffs.
“Any action which increases market access or better ensures a level playing field will certainly be welcomed and could lead to continued discussions,” Steven Okun, a Singapore-based senior advisor at strategic advisory firm McLarty Associates, told AFP.
“Still, one must presume that as the existing and proposed tariffs are to spur China to address the US’ IPR concerns, only action directly related to that would ultimately impact the 301 tariffs,” he said.
The White House said Saturday the two sides would “immediately” begin talks on “structural changes” affecting forced technology transfer, intellectual property protection and cyber theft.