Published On: Mon, Dec 3rd, 2018

BREAKING: Donald Trump trade war VICTORY? China agrees to reduce tariffs on US cars


Stocks jumped higher on Monday after Washington and the US said they would hold fire on further tariffs. Hours after the announcement, the US President confirmed the investors’ hopes and tweeted: “China has agreed to reduce and remove tariffs on cars coming into China from the US. “Currently the tariff is 40 percent.”

 

Last week, the American firebrand ordered a review of China’s 40 percent tariff on auto imports from the US.

It emerged that 25 percentage points are the result of Chinese retaliation against Trump’s tariffs on imports from China.

The US charges a 27.5 percent tax on imported cars from China.

China and the US reached a temporary ceasefire in their trade war during “highly successful meeting” between President Trump and President Xi Jinping at the G20 on Saturday.

The two world leaders met for a dinner meeting to discuss trade at the sidelines of the Group of 20 leaders’ summit.

They spoke for around two and a half hours and the discussion ended with Trump agreeing to hold off on raising existing tariffs on $200billion pending new talks.

The US President had previously planned to raise tariffs on certain Chinese goods to 25 percent on January 1, but revoked this plan as a result of the talks.

However, the White House said: “If at the end of this period of time, the parties are unable to reach an agreement, the 10 percent tariffs will be raised to 25 percent.”

It added that in return China agreed to buy a “very substantial” amount of agricultural, energy, industrial and other products.

In response to the ceasefire, major indexes in Hong Kong and Shanghai jumped more than 2.5 percent in morning trading in Asia.

Dow futures leaped about 450 points.

Stocks in Japan and Australia were also up more than 1 percent.

Tai Hui, chief market strategist for Asia Pacific at JPMorgan Asset Management said: “The good news is that this truce should be seen as Washington recognising the potential damage on the US economy if tariffs escalate further.”



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