China Plans Tariff Cut on Wide Range of Consumer Goods

President Donald Trump's about-face on the ban on Chinese company ZTE adds to his allies concerns

AP President Donald Trump's about-face on the ban on Chinese company ZTE adds to his allies' concerns

President Donald Trump tweeted twice Monday about a possible trade deal with China and how it could benefit USA farmers.

"Our trade deal with China is moving along nicely, but in the end we will probably have to use a different structure in that this will be too hard to get done and to verify results after completion", Trump wrote in his post. While Trump has blinked on China by putting on hold his promised sweeping tariffs on Chinese imports to the USA, he has attempted to coerce and shame U.S. allies like Japan, India, and South Korea, even though their combined trade surplus with the United States - $95.6 billion in 2017 - amounts to about a quarter of China's.

"There was a consensus on taking effective measures to substantially reduce the United States trade deficit in goods with China", the statement said.

USA and Asian markets dropped after the comments were posted.

China will cut import duties on most passenger vehicles to 15 percent from 25 percent effective July 1, in a bid to open up China's market, boosting competition and bolstering the local auto sector, the Chinese Finance Ministry said in a statement on Tuesday, as carried by Reuters.

US$50 billion in tariffs on Chinese goods are ready to be enacted at Trump's command
AP US$50 billion in tariffs on Chinese goods are ready to be enacted at Trump's command

The People's Republic of China flag and the U.S. Stars and Stripes fly along Pennsylvania Avenue near the US Capitol during Chinese President Hu Jintao's state visit in Washington, DC, US on January 18, 2011.

"But once they (China) have figured that out, then they start discounting the pressure and the noise and so on and they focus just on the bottom line". "Anything that is outside the area of free trade and lower barriers and symmetrical rules is not favourable to European trade", said Francois Godement, Director of Asia & China programme at the European Council on Foreign Relations in Paris. I dont like to talk about deals until theyre done.

Since the conclusion of those talks, China has stated an intention to cut tariffs on US auto and auto part exports to China nearly in half. Dan DiMicco, a former steel executive who advised Trump during the 2016 presidential campaign, dismissed the truce as "more false promises and delaying tactics".

Trump's assault on the rules-based order extends also - and ominously - to trade. The trade war is "on hold", as U.S. Treasury Secretary Steven Mnuchin first put it, and he even went back to correct himself by saying the confrontation "was never a trade war" but a "trade dispute".

Earlier this month, Reuters reported that Ford Motor Co's imported vehicles were being held up at Chinese ports, adding to a growing list of USA products facing issues at China's borders. "We are looking for a permanent exemption".

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On Monday, Trump tweeted that China must maintain its pressure on its neighbor ahead of any potential deal. But Moon suffered a serious setback over the past week as the North abruptly dampened ties with the South.

US-China Tariff War: To be Continued?

A similar move in the auto industry would open yet another front in the Republican president's confrontational rows over trade that have drawn global outcry from allies and partners.

The U.S.is also a major supplier to China of agricultural products, particularly soybeans and cotton.

Roughly one-third of all US vehicle imports a year ago were from Asia.

"We're not in the business of holding talks under the threat of sanctions", he said. For example, China is desperate to lift the seven-year ban on Chinese telecommunications company ZTE sourcing USA parts, a ban which it says jeopardizes the future of the company and its 70,000 employees.

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In a separate statement released by the White House, Trump said he had "instructed" Ross to "consider" kicking off the probe.

Passenger cars make up around 30 percent of Japan's total exports to the USA and Tokyo has already threatened Washington with retaliation at the World Trade Organization for the steel tariffs.

The potential damage to USA interests is compounded by the fact that China, now led by its strongest President in generations, is rarely accused of playing a short-term game - and thinks in decades and centuries rather than the blinks of time between United States elections.

Trump frequently gushes over the lavish welcome he received during his state visit to China past year.

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