Published: Fri, May 25, 2018
Global | By Craig Ferguson

China says it will cut auto import tariffs on July 1

China says it will cut auto import tariffs on July 1

This move was in conjunction with Washington nearing a decision to lift its ban on USA firms supplying Chinese telecoms gear maker ZTE Corp, sources said on Tuesday, further easing trade tensions between the world's two largest economies.

There were reports that the United States had reached a deal with China with respect to ZTE's ban. The topic of the day is ZTE (HKG:0763, now suspended from trading), the Chinese telephony manufacturer that the American intelligence community has long had concerns about (along with other Chinese tech companies).

The Commerce Department's review of penalties against ZTE Corp. for the violations will bear in mind any threats to American security, Mnuchin said Tuesday during a hearing before a Senate Appropriations subcommittee in Washington.

Perhaps this unfavorable truce was the best Mr. Trump could achieve at a time when he also needs Mr. Xi's help dealing with North Korea.

The Dow Jones Industrial Average .DJI fell 178.88 points, or 0.72 percent, at 24,834.41, the S&P 500 .SPX lost 8.57 points, or 0.31 percent, to 2,724.44 and the Nasdaq Composite .IXIC dropped 15.58 points, or 0.21 percent, to 7,378.46. Negotiations in Washington last week ended with China agreeing to buy more imports from the US, averting for now the imposition of USA tariffs on billions of dollars of Chinese products.

"I think that they're a start, but we need something", he said.

Trump has been insistent about reducing the trade deficit - which the White House has blamed for the loss of millions of U.S.jobs - between the two countries and has taken aim at China's practice of intellectual property theft.

The import duty on vehicle parts will be reduced to 6%, the Finance Ministry said.

The announcement by China's finance ministry follows a pledge by Xi last month to lower the import duties and to ease foreign ownership restrictions for the Chinese auto industry.

Improved access to the Chinese market is a key demand of USA negotiators, who say Chinese rules put worldwide firms at a disadvantage.

Speaking at the White House, Trump said USA technology companies have been hurt by an April Commerce Department decision that prohibits them from selling components to China's second-largest telecommunications equipment maker. The Pentagon previously banned the phones on military bases because of security concerns, namely that the phones could be used for spying by the Chinese government.

Cars produced in the USA for foregn companies like Volkswagen and Toyota wouldn't be affected.

While some US officials said the penalties against ZTE - the fine and the ban on sale of USA components until 2025 - were a law enforcement action, Trump linked the issue to ongoing trade and tariff disputes with China. Chris Van Hollen (D-MD) was added to legislation that would tighten oversight of foreign direct investment.

He said the situation was "deeply troubling, regardless of your political party".

Negotiations about the alternative punishment are ongoing and come amid broader trade negotiations with China.

And on the question of whether President Trump has matched candidate Trump's trade promises, Inhofe predicted "he'll be good on these talks when it's over with".

I dont like to talk about deals until theyre done.

Criticism from Democrats was equally harsh, suggesting that bipartisan, veto-proof congressional action to counter any deal on ZTE was not out of the realm of possibility.

He did not confirm that a deal was in the works.

About 6.2 billion shares changed hands on US exchanges.

Trump himself is not exactly helping to make the administration's message more coherent. "There is no deal". "It emboldens foreign companies to play fast and loose with USA sanctions when we should be putting the fear of God into these companies, especially one that was as brazen as ZTE".

Trump said on Tuesday that ZTE may instead face a fine of up to US$1.3 billion, new management and a new board of directors.

The terms he described were identical to deal described in the newspaper report. Senate Minority Leader Chuck Schumer echoed his Republican colleague Senator Rubio on Twitter.

There is at least one US -based auto manufacturer that could win big from the reduction in Chinese tariffs.

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