Tuesday June 18, 2019
Home Lead Story China Agrees ...

China Agrees To Cut Tariffs on US Cars: Donald Trump

"Given the complexity of interactions between the two economies, the rest of the world will still be holding its collective breath," said the official China Daily in an editorial

0
//
Donald Trump, U.S.
Donald Trump. VOA

China has agreed to cut tariffs on cars it imports from the US, President Donald Trump has said, after he negotiated a truce in the trade war with Beijing. The announcement boosted the financial markets.
“China has agreed to reduce and remove tariffs on cars coming into China from the US. Currently the tariff is 40 per cent,” Trump tweeted on Sunday.

The outcome of the Trump-Xi meeting boosted financial markets in Asia Pacific on Monday. The benchmark Shanghai Composite index led the way with a rise of 2.57 per cent while Hong Kong was up 2.45 per cent and Tokyo closed 1 per cent better off. Australia’s benchmark ASX200 index finished the day up 1.84 per cent.

The increases paved the way for sharp rises on European and US exchanges later in the day with futures trade seeing the FTSE100 opening up by 1.6 per cent and the Dow Jones industrial average on Wall Street expected to leap 2 per cent.

But Donald Trump didn’t give details about the car tariffs or when the change would happen and what the new tariff level would be, CNN reported. There was no immediate response from the Chinese government on cutting car tariffs.

Trump’s announcement came shortly after he and his Chinese counterpart Xi Jinping announced a breakthrough during the G-20 summit in Buenos Aires on Saturday, temporarily pausing the trade row between the world’s two largest economies that saw tit-for-tat tariffs imposed on each other’s products.

Trump, Government, Afganistan
Trump says China to cut tariffs on US cars; markets rise. VOA

Neither country had mentioned the car tariff issue in their official read-outs of the Trump-Xi weekend meeting in which Washington agreed to hold off on his threat to impose 25 per cent tariffs on $200 billion worth of Chinese goods from January 1, leaving them at the current 10 per cent rate.

In return, Beijing agreed to purchase more agricultural products from US farmers immediately.

Earlier this year, China lowered its tariffs on foreign car imports from 25 per cent to 15 per cent. However, it later imposed new additional tariffs of 25 per cent on American-made passenger vehicles after Trump raised the tariff on Chinese autos from 2.5 to 27.5 per cent.

Also Read- To Help Poor Countries Adapt To Global Warming, World Bank Doubles Its Funding

The US leader called his deal with Xi “incredible”. “It goes down, certainly – if it happens, it goes down as one of the largest deals ever made,” he told reporters.

Meanwhile, the Chinese state media warned that while the new “consensus” was a welcome development and gave both sides “breathing space” to resolve their differences, there was no “magic wand” that would allow the grievances to disappear immediately.

“Given the complexity of interactions between the two economies, the rest of the world will still be holding its collective breath,” said the official China Daily in an editorial. (IANS)

Next Story

Find Out Those 28 US Goods on Which India Increases Tariffs Amid Trade Spat

The retaliatory move came days after Washington removed New Delhi from a list of countries that have preferential access to its market

0
tariffs
FILE - Containers are piled up at a terminal at the Jawaharlal Nehru Port Trust in Mumbai, India, June 29, 2017. India’s commerce ministry says it will not try to hold onto its preferential zero-tariffs status with the United States. VOA

India has hiked tariffs on 28 goods imported from the United States as a trade spat between the two countries intensifies. The retaliatory move came days after Washington removed New Delhi from a list of countries that have preferential access to its market.

“India has put its cards on the table,” says trade expert Biswajit Dhar at Jawaharlal Nehru University in New Delhi. “The U.S. has upped the ante and it is also threatening to take further action. This required India to respond.”

The trade spat has escalated ahead of a visit later this month to New Delhi by U.S. Secretary of State Mike Pompeo who has pushed India to allow American companies more access to its markets and to lower barriers.

tariffs
FILE – A female laborer winnows almonds inside a small-scale factory unit in New Delhi, Jan. 15, 2011. India is by far the largest buyer of U.S. almonds. VOA

Experts fear the growing tensions could cast a shadow over a deepening India-U.S. strategic partnership that aims at countering China’s growing influence.

The American goods that attract higher tariffs beginning Sunday include almonds, apples, walnuts, chickpeas and lentils, as well as some stainless steel products. New Delhi is the largest importer of U.S. almonds and the second largest buyer of apples. The total impact of the Indian tariffs is estimated to be about $240 million.

Increase deferred several times

The hike in duties by New Delhi was announced a year ago in retaliation for Washington’s imposition of higher tariffs on imported steel and aluminum, but deferred several times as both sides held talks to bridge their differences.

But India went ahead after the U.S. earlier this month imposed another punitive measure: removing New Delhi from a trade program to aid the economies of developing countries. Washington said the preferential status was revoked because India has failed to provide adequate access to its markets for U.S. firms. It will impact Indian imports worth $5.6 billion. New Delhi was the largest beneficiary of the Generalized Systems of Preferences program. India’s commerce ministry has called the decision unfortunate.

tariffs
A shop in New Delhi sells almonds and walnuts, which are among the 29 U.S. products on which India has announced retaliatory tariffs starting August 4. India is the largest market for U.S. almonds. (A. Pasricha/VOA)

US markets

U.S. President Donald Trump has repeatedly named India as one of the countries that follow trade practices unfair to the United States. Washington wants New Delhi to address a trade imbalance, the $142 billion bilateral trade is skewed in New Delhi’s favor by about $30 billion.

Dhar says among the sticking points are the demands by Washington that India lower tariffs on dairy and poultry to encourage U.S. agricultural imports. But these are areas where New Delhi faces domestic challenges.

“India is battling with this very large population of small and marginal farmers. It is very difficult for India to drop tariffs specially as we know U.S. agricultural products are being subsidized,” according to Dhar.

tariffs
U.S. Secretary of State Mike Pompeo addresses the India Ideas Summit in Washington, June 12, 2019. VOA

The United States is also concerned about recent rules that it says adversely impact the operations of its e-commerce companies such as Amazon and Walmart in India. Even though the moves by New Delhi and Washington signal that each is taking a tougher stand, they could also push both sides to more serious negotiations to resolve their differences.

ALSO READ: Trump Announces Migration Deal with Mexico, Averting Threatened Tariffs

“We remain open to dialogue and hope that our friends in India will drop their trade barriers and trust in the competitiveness of their own companies, their own businesses, their own people,” Pompeo said at policy speech at the U.S. India Business Council in Washington on Thursday. He said that countries that have provided American companies access to their markets have seen “real opportunity.”

Pompeo will in New Delhi on June 25-26 to hold talks with his Indian counterpart. Indian Prime Minister Narendra Modi and U.S. President Trump are also expected to meet on the sidelines of the G-20 summit in Japan later this month. (VOA)